Turkey Negotiates with ExxonMobil for Multibillion-Dollar LNG Agreement

ExxonMobil and Turkey are in discussions regarding a multibillion-dollar agreement for the purchase of liquefied natural gas.Turkish energy minister Alparslan Bayraktar revealed in an interview with the Financial Times that the country seeks to diversify its energy suppliers to enhance national security.

The potential deal would involve Turkey acquiring up to 2.5 million tonnes of LNG annually from Exxon at an estimated cost of $1.1 billion.

Turkish energy minister Alparslan Bayraktar mentioned that the agreement could last for a decade, although the specific terms were still being negotiated.

ExxonMobil and Turkey’s discussions take place as the country aims to lessen its dependence on Russian energy.Natural gas plays a crucial role in Turkey’s electricity generation, and in 2022, the country imported all of the gas it consumed.

Turkey Explores International Energy Partnerships
Russia continues to be Turkey’s main fuel supplier, providing over 40% of its consumption last year.However, the recent use of energy supplies as a political tool, particularly in connection to President Putin’s war in Ukraine, has put Turkey in a precarious position.
Russia’s move to reduce gas deliveries to the EU serves as a clear warning to other nations that depend heavily on Russian supplies.Turkey has maintained a close relationship with President Putin during the Ukraine conflict, diverging from the stance of its NATO allies.

Nonetheless, as some of its longstanding contracts with Russia are set to expire in 2025, Ankara is actively seeking alternative suppliers.

US Relations Enhance Turkey’s Energy Choices
Turkey lifted its veto on Sweden’s NATO membership bid, and the US approved a sale of F-16 fighter jets to Turkey in January.

Turkey is also diversifying its energy sources by gradually increasing its imports of liquefied natural gas (LNG) rather than relying solely on pipeline gas.In 2022, LNG accounted for about 30% of Turkey’s natural gas imports, doubling from 15% in 2014.

LNG offers greater sourcing flexibility as it can be acquired from various global markets, unlike pipeline gas, which depends on established infrastructure connections.

Currently, Turkey imports Russian pipeline gas through the Blue Stream and TurkStream channels across the Black Sea, which required significant investment and time to construct.