Turkey's state gas grid operator Botas on May 8 signed a deal with US supermajor ExxonMobil for liquefied natural gas (LNG) supplies, the country’s energy minister announced, throwing into question whether or not Ankara will scale down reliance on Russian gas supplies in coming years.

"The U.S. is already one of our important suppliers of LNG," Energy Minister Alparslan Bayraktar said on social media platform X, adding that the deal was signed in Washington.

Bayraktar did not provide any other details on the agreement, but added: "With this agreement, which is planned to be long-term, we will take another step towards diversifying our resources."

At the end of April, Bayraktar told the Financial Times in an interview that Ankara wants to build a "new supply portfolio" that will make it less reliant on any single partner. He added in the interview that Turkey would annually secure up to 2.5mn tonnes of LNG through a deal under discussion with ExxonMobil that could be drawn up for a decade. Such a deal for the super-chilled fuel would likely cost Turkey over a billion dollars a year at current prices.

Turkey has very little oil and gas of its own. It is highly dependent on imports from Russia, Azerbaijan and Iran, as well as on LNG shipments from Algeria, Qatar, the US, Nigeria and Oman.

Despite its lack of hydrocarbon resources, Turkey has plans to set up an energy hub from where oil and gas flows reaching the country could be redistributed to European and potentially other export markets. However, wary of Turkey’s ambitions to become an energy supply powerhouse based on re-exports, some potential client countries have expressed concerns that the hub could be used to disguise Russian oil and gas flows currently banned from their markets by Ukraine war-related sanctions.

Around 2.5mn tonnes/year of LNG would cover around 7% of Turkey’s natural gas consumption based on data for last year from the country’s Energy Market Regulatory Authority.

Some of Turkey’s long-term agreements with Moscow for gas will expire in 2025.

Over 40% of Turkish gas imports came from Russia in 2023, most of which was delivered via pipelines.

Despite Turkey being a Nato member, Ankara and Moscow have maintained strong trade and economic relations, with Russia also serving as Turkey’s top supplier of oil.

Iran provides around 17% of Turkey’s gas imports but the deal for the piped deliveries is slated to expire in 2026. Azerbaijan supplies 16% of the country’s gas imports.

In 2022, the US supplied 10% of Turkey’s natural gas imports, while in 2023 Turkey went to the spot market and imported 5mn tonnes of LNG gas from the US.

ExxonMobil is ramping up its LNG portfolio, while Turkey is increasing its infrastructure for importing and storing LNG. A partnership between the two not only makes sense but has become almost inevitable, according to oil and gas trade media outlet NewsBase.

ExxonMobil has set its sights on increasing its production capacity to 40mn tonnes/year by the end of the decade, which would mark a doubling from its 2020 level. Meanwhile, Turkey’s expansion of its LNG infrastructure has seen gas imports of LNG climb to 30% in 2023 compared to 15% in 2014.

LNG makes matters more flexible for Turkey when it comes to suppliers of natural gas, as opposed to the inflexibility of pipeline gas.

Turkey is able to receive gas via seven international pipelines, while it has five LNG facilities, including three floating storage and regasification units (FSRU) and two underground natural gas storage facilities.

Energy minister Bayraktar said he arrived in the US capital for various talks.

"We are among the few countries in the world with our gasification capacity. We will continue to contribute to the energy supply security of both our country and our region," Bayraktar added.

The minister said in a separate post on X on May 9 that he met US Secretary of Energy Jennifer Granholm and that an energy and climate programme between the two countries was initiated.

"We initiated the Energy and Climate Dialogue Program between our countries and held its first meeting. We hope that the program will bring together public and private sector representatives and serve as a productive platform for all stakeholders," Bayraktar wrote on X.

"During our meeting, we also evaluated many topics such as natural gas, renewable energy, energy efficiency, nuclear energy and critical minerals," he added.

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