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Turkey is in talks with US vitality supermajor ExxonMobil over a multibillion-dollar deal to purchase liquefied pure fuel as Ankara seeks to curb its dependence on Russian vitality.
The nation, which imports practically all of its pure fuel, is looking for to construct a “new provide portfolio” that can make it much less reliant on any single associate, Turkish vitality minister Alparslan Bayraktar mentioned in an interview with the Monetary Instances.
The talks come amid bettering relations between Turkey and the US after Ankara dropped its veto on Sweden becoming a member of the Nato army alliance and Washington agreed to promote Turkey billions of {dollars} value of F-16 fighter jets. In addition they come as Turkey is looking for to reposition itself as a regional vitality hub.
Turkey would safe as much as 2.5mn tonnes of LNG a 12 months by way of the long-term deal below dialogue with Exxon, Bayraktar mentioned, including that the pact might final for a decade.
Bayraktar mentioned the industrial phrases of the Exxon deal have been nonetheless below dialogue, however 2.5mn tonnes of LNG shipped to Turkey would presently price about $1.1bn, in accordance with pricing assessments by information company Argus.
The two.5mn tonnes of LNG below dialogue can be sufficient to cowl roughly 7 per cent of Turkey’s pure fuel consumption final 12 months, in accordance with FT calculations primarily based on information from the Vitality Market Regulatory Authority. Final 12 months, Turkey imported 5mn tonnes of LNG from the US on the “spot” market the place vitality is purchased and bought for imminent supply, Bayraktar mentioned.
Exxon has bold plans to increase its LNG portfolio to 40mn tonnes a 12 months by 2030, about double what it was in 2020.
The corporate owns a 30 per cent stake in Golden Go LNG, a brand new export terminal on the US Gulf coast that it’s constructing with associate QatarEnergy. It has a capability exceeding 18mn tonnes a 12 months and is because of start producing LNG within the first half of 2025. Exxon can be pursuing LNG initiatives in Papua New Guinea and Mozambique.
Exxon mentioned it had preliminary discussions with the Turkish authorities relating to potential LNG alternatives however wouldn’t touch upon the main points of its industrial technique.
Ankara, which had additionally enquired with different US pure fuel producers about LNG offers, is looking for to “diversify” its pure fuel provides earlier than a few of its long-term contracts with Russia expire in 2025 and people with Iran expire the next 12 months, Bayraktar mentioned.
Turkey depends closely on pure fuel for energy era and business. Households additionally profit from massive and expensive fuel subsidies by way of state fuel firm Botaş.
Russia is by far Turkey’s largest pure fuel provider, accounting for greater than 40 per cent of its consumption final 12 months, which largely arrived by pipelines. Ankara presently has long-term LNG provide offers with Algeria and Oman.
Turkey has retained sturdy commerce, financial and vacationer ties with Russia even after Turkey’s Nato allies shunned Moscow after it launched a full-scale invasion of Ukraine in 2022.
Moscow can be Turkey’s high oil provider and can personal and function the nation’s first nuclear energy plant, presently below building, on the Mediterranean coast. Russia, together with South Korea, each have “critical curiosity” in the same nuclear challenge on the Black Sea, Bayraktar mentioned.
Bayraktar defended his nation’s relations with Russia, saying that “aggressive” vitality offers with Russia have helped Turkey to keep away from the vitality disaster that gripped main European nations after the warfare started.
“For safety of provide, we have to get fuel from someplace. It could possibly be from Russia, it could possibly be from Azerbaijan, it could possibly be Iran, or LNG choices,” Bayraktar mentioned, including that “we have to take a look at the competitiveness edge; which fuel is cheaper?”
Bayraktar added that Turkey had made a concerted effort to increase its infrastructure for receiving and storing LNG. About 30 per cent of Turkish pure fuel imports final 12 months have been LNG from 15 per cent in 2014.
Turkey has additionally been launching its personal exploration and manufacturing operations, together with a big fuel web site within the Black Sea and oil drilling within the nation’s south-east. The nation might later this 12 months start exploring for oil within the Black Sea as properly, Bayraktar mentioned.
Whereas native initiatives coated solely a tiny fraction of Turkey’s vitality wants presently, that they had the potential to be “fairly a game-changer for us,” Bayraktar mentioned.
Extra reporting by Shotaro Tani in London
