Türkiye is in talks with US energy giant ExxonMobil over a multibillion-dollar deal to buy liquefied natural gas, in an effort to curb its dependence on Russian energy, the Financial Times reported on Sunday.
The country is seeking to build a “new supply portfolio” that will make it less reliant on any single partner, Turkish Energy Minister Alparslan Bayraktar told the FT in an interview.
The talks come amid improving relations between Türkiye and the US after Ankara dropped its veto on Sweden joining the NATO military alliance and Washington agreed to sell Türkiye billions of dollars worth of F-16 fighter jets. They also come as Türkiye is seeking to reposition itself as a regional energy hub.
Ankara would secure up to 2.5mn tons of LNG a year through the long-term deal under discussion with Exxon, Bayraktar said, adding that the pact could last for a decade.
The Minister said the commercial terms of the Exxon deal were still under discussion, but 2.5mn tons of LNG shipped to Türkiye would currently cost about $1.1 billion, according to pricing assessments by data agency Argus.
The 2.5mn tons of LNG under discussion would be enough to cover roughly 7 percent of the country’s natural gas consumption last year, according to FT calculations based on data from the Energy Market Regulatory Authority.
Last year, Türkiye imported 5mn tons of LNG from the US on the “spot” market where energy is bought and sold for imminent delivery, Bayraktar said.
Exxon has ambitious plans to expand its LNG portfolio to 40mn tons a year by 2030, about double what it was in 2020.
The company owns a 30 percent stake in Golden Pass LNG, a new export terminal on the US Gulf coast that it is building with partner QatarEnergy.
It has a capacity exceeding 18mn tons a year and is due to begin producing LNG in the first half of 2025.
Exxon is also pursuing LNG projects in Papua New Guinea and Mozambique.
Exxon said it had initial discussions with the Turkish government regarding potential LNG opportunities but would not comment on the details of its commercial strategy.
Ankara, which had also enquired with other US natural gas producers about LNG deals, is seeking to “diversify” its natural gas supplies before some of its long-term contracts with Russia expire in 2025 and those with Iran expire the following year, Bayraktar said.
Türkiye relies heavily on natural gas for power generation and industry. Households also benefit from large and costly gas subsidies through state gas company Botas.
Russia is by far Türkiye’s biggest natural gas supplier, accounting for more than 40 percent of its consumption last year, which mostly arrived by pipelines.
Ankara currently has long-term LNG supply deals with Algeria and Oman.
Türkiye has retained strong trade, economic and tourist ties with Russia even after Ankara’s NATO allies shunned Moscow after it launched a full-scale invasion of Ukraine in 2022.
Moscow is also Türkiye’s top oil supplier and will own and operate the country’s first nuclear power plant, currently under construction, on the Mediterranean coast.
Russia, along with South Korea, both have “serious interest” in a similar nuclear project on the Black Sea, Bayraktar said.
The Turkish Minister defended his country’s relations with Russia, saying that “competitive” energy deals with Russia have helped Ankara to avoid the energy crisis that gripped major European countries after the war began.
“For security of supply, we need to get gas from somewhere. It could be from Russia, it could be from Azerbaijan, it could be Iran, or LNG options,” Bayraktar said, adding that “we need to look at the competitiveness edge; which gas is cheaper?”
