Turkey’s gas hub plans are boosted by a 10-year LNG deal with Shell

On Monday, Turkey signed a ten-year deal with Shell that will see the supermajor supply Turkish state energy company BOTAS for ten years starting in 2027, in a boost to Turkey’s plans to become a regional gas hub for Europe and the Mediterranean.

The agreement calls for Shell to supply up to 4 billion cubic meters of liquefied natural gas per year to BOTAS from its US and global portfolio, the Turkish company said on Monday.

The deal will allow BOTAS to expand its access to LNG and use its terminal and pipeline infrastructure to help Turkey diversify its natural gas supply and become an important regional gas hub, the Turkish firm said.

Russia is currently Turkey’s main supplier of natural gas, followed by Azerbaijan, Algeria, Iran and the United States.

Turkey imports all the natural gas it needs through pipelines and LNG import facilities. The country is also betting on recent gas discoveries in the Black Sea to reduce its gas imports and diversify its energy sources. Turkey has big plans to become a hub for natural gas supply and trading.

“Our goal in the field of natural gas, of which we imported 99% until the discovery of gas from the Black Sea, is to diversify the supply and provide natural gas to our citizens and industry at a more competitive and affordable rate,” said the minister Turkish Minister of Energy and Natural Resources, said Alparslan Bayraktar.

“We are also satisfied that BOTA? will acquire new capacities in the field of LNG transportation by ships by receiving LNG at the loading port within the scope of the agreement,” the minister added.

“Such agreements make significant contributions to the security of supply not only of our country but also of the region,” the official said.

As part of its efforts to diversify its gas supply, BOTAS signed an agreement with ExxonMobil in May this year, whereby the US supermajor will supply up to 2.5 million tons of LNG each year for 10 years .

By Charles Kennedy for Oilprice.com

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