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Turkey Seeks LNG Deal With Exxon to Reduce Reliance on Russia

Turkey is discussing a long-term LNG supply deal with U.S. supermajor ExxonMobil as it looks to reduce reliance on Russia or any single supply source, Turkish Energy Minister Alparslan Bayraktar told the Financial Times in an interview published on Sunday.

A potential deal with Exxon could be for the acquisition of 2.5 million tons of LNG per year for a decade, the minister said, while FT calculations have found that based on a pricing assessment by Argus, the annual delivery of these volumes could cost about $1.1 billion.

Turkey is looking to develop its latest large natural gas discoveries in the Black Sea, but in the meantime, Ankara relies on imports for almost all the natural gas it currently consumes.    

The country, a NATO member that continues to hold strong energy and trade ties with Russia, is now looking to build a “new supply portfolio” for its gas needs, minister Bayraktar told FT.

Turkey is not shunning any source of supply and has supply deals with Russia, Iran, Oman, and Algeria.

Russia is Turkey's single largest natural gas supplier and, in 2023, met about 40% of the country's demand.

Ankara has imported LNG from the United States in recent months, but the volumes have been purchased on the spot LNG market.

Now Turkey looks to diversify its suppliers with additional long-term LNG deals. At present, the country has long-term LNG supply deals with Algeria and Oman.  

The talks with Exxon come amid improved U.S.-Turkey relations after Ankara lifted its veto to allow Sweden to join NATO earlier this year.

Turkey, which was hard hit by the soaring energy prices during the latest energy crisis, wants to diversify its gas supply and will be looking at the price of gas as a primary driver of decisions.

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“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 told FT.

By Tsvetana Paraskova for Oilprice.com

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