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Türkiye signs long-term LNG deal with Shell

Türkiye's pipeline company BOTAS inks a major supply agreement with the British oil giant as it aims to diversify sources of supply.

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Bayraktar meet with Shell Senior Executive Wael Sawan as part of the program for the signing of the LNG agreement between Shell and Petroleum Pipeline Corporation (BOTAS) in Ankara. / Photo: AA

Turkish state energy company BOTAS and British oil major Shell have signed a 10-year LNG agreement.

"A total of 40 LNG cargoes of approximately 4 billion cubic metres will be delivered annually for a period covering 10 years starting from 2027," Turkish Energy Minister Alparslan Bayraktar said on Monday.

"This agreement ... provides additional regional and global trade opportunities with the options of receiving (LNG) from the filling port and unloading to European terminals."

Bayraktar signed the agreement with Shell's CEO Wael Sawan in Ankara.

The minister said the deal will strengthen Türkiye's prospects of becoming a natural gas hub and its role in playing a part in Europe's energy supply security.

Today, we signed a 10-year LNG agreement between BOTAŞ and Shell, starting from 2027. Under this agreement, approximately 4 billion cubic meters of LNG will be delivered annually, totaling 40 billion cubic meters over the contract period.

The agreement also provides additional…
— Alparslan Bayraktar (@aBayraktar1) September 2, 2024

Regional hub ambitions

Bayraktar said agreements covering piped gas and LNG with Azerbaijan and Algeria have been renewed, and now the country trade in natural gas with 34 countries.

"BOTAS, which celebrates its 50th anniversary this year, is by far the largest company in Türkiye, with a turnover of $26.5 billion in 2023."

Türkiye's investment in natural gas infrastructure has increased in recent years, and it can now handle 70-80 billion cubic metres (BCM) of natural gas annually, Bayraktar said.

BOTAS signed a 10-year LNG agreement with ExxonMobil in May, covering the purchase of up to 2.5 million tons of LNG per year from the US company.

Türkiye meets almost all of its consumption needs via imported gas and brought in 14.3 BCM, or 28.3 percent of the 50.5 BCM that it consumed last year, in the form of LNG.

Türkiye has seven transnational gas pipelines, five LNG facilities, including three floating storage and regasification units (FSRU) and two underground natural gas storage facilities.

The country aims to become a key regional gas hub.