Regional gas hub in Türkiye could be operational by 2025: Bayraktar

Türkiye's talks with Russia to strike a deal on a gas trading hub are ongoing and the hub in Istanbul could begin operations in 2025, the Turkish energy minister has said.

"We have set up a strong infrastructure for a trading platform that could operate as soon as 2025 in Istanbul Finance Centre under the partnership of Botas and Gazprom," Energy Minister Alparslan Bayraktar said in an interview with Turkish daily Milliyet published on Friday.

"We sent (Russia) a memorandum of understanding," Bayraktar said, adding that Russian president Vladimir Putin told his Turkish counterpart Tayyip Erdogan that he'd give instructions to Gazprom for the gas hub.

Bayraktar stated that an Istanbul Gas Index will be established, meaning gas prices will be set in Istanbul, with Russia selling its gas at prices based on this index.

Türkiye, which has announced its ambition to become a gas hub by increasing both imports and exports, is in the process of negotiating supply deals with producers and consumers.

Transfer facilitator in the region

During Erdogan's visit to Russia for the BRICS summit in October, Turkish and Russian leaders continued to discuss ways to advance the potential and specifics of the project to establish a gas hub in in Türkiye.

The idea of a gas hub in Türkiye was first suggested by Russian President Putin in October 2022 after the Nord Stream pipeline explosions.

Turkish President Recep Tayyip Erdogan also expressed considerable interest in the idea as Russia seeks to replace lost sales to Europe.

The country's efforts to become a natural gas hub resurfaced in September 2023, when Putin and Erdogan met in Sochi.

During the meeting, a road map between Russian energy company Gazprom and the Turkish Petroleum Pipeline Corporation BOTAS was referenced, with establishing a joint working group being the next move.

Ending fossil fuel imports by 2027

A regional natural gas center would contribute to the security of Türkiye as well as Europe's energy supplies.

Europe relies heavily on natural gas, with the majority of imports coming from Russia.

However, following the Russia-Ukraine war, European embargoes have sharply reduced Russian gas exports, with the EU pledging to end all Russian fossil fuel imports by 2027.

Reduced gas flows from Russia through Ukraine have highlighted Türkiye's role as a key transit hub in the region.