Shell LNG Deal Lights Up Turkey’s Energy Future

Shell plc has entered into a 10-year agreement with Turkey’s state-owned energy company, BOTAS, to supply liquefied natural gas (LNG). Under this agreement, starting in 2027, Shell will provide 4 billion cubic meters of LNG annually to Turkey, sourced from its U.S. and global energy assets.

Before the discovery of the Sakarya gas field in the Black Sea, Turkey relied heavily on imported natural gas. Despite this discovery and expanded oil and gas distribution capabilities, the country continues to be a net importer.

Turkey’s primary natural gas suppliers include Russia, Azerbaijan, Algeria, Iran, and the United States, with gas arriving through pipelines and LNG terminals.

LNG Supply Diversification for Turkey

Turkey is actively working to diversify its natural gas sources by utilizing its extensive terminal and pipeline infrastructure. This strategy aims to provide a stable and affordable supply of natural gas to its citizens and industries. Diversification is expected to help Turkey stabilize gas prices and ensure a more reliable energy supply.
As Turkey’s population increases, so will its need for LNG. The agreement with Shell is projected to cover around 8% of Turkey’s current gas demand, helping to meet the country’s growing energy requirements. Additionally, it positions BOTAS to expand its LNG access and strengthen its role as a regional gas hub.

Turkey’s Energy and Natural Resources Minister stated that the deal would equip BOTAS with crucial skills in LNG transportation, including the ability to transport the LNG via ships from the loading port.

Shell Partnership Key to Turkey’s Regional Gas Hub Aspirations

This deal is a significant step in boosting Turkey’s energy security and enhancing Europe’s energy needs. Turkey, strategically located between Asia and Europe, aims to become a vital energy hub by transporting gas from Russia, Azerbaijan, and Turkmenistan to Western markets.

Natural gas from Turkmenistan could particularly help Western countries reduce their reliance on Russian gas. Turkish authorities have highlighted potential collaborations with Azerbaijan to facilitate the transportation of Turkmen gas to Europe through Turkey.
Turkey is expanding its natural gas supply to meet domestic demand while also creating a surplus for export. In May 2024, BOTAS signed a similar LNG supply deal with ExxonMobil for 2.5 million tons of LNG annually over 10 years. The country has also extended its agreements with Azerbaijan (until 2030) and Algeria (until 2027).

Currently, Turkey exports natural gas to several European nations, including Bulgaria, Hungary, Romania, and Serbia. Its domestic gas network, which covers all 81 provinces and 212 organized industrial zones, is well-equipped to handle this growing energy demand.

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