Türkiye on Wednesday took a further step toward becoming a regional gas re-exporter with a major supply deal signed between its state energy company BOTAŞ and France's TotalEnergies, its fourth long-term import deal with non-state-owned firms this year.
Turkish Petroleum Pipeline Corporation (BOTAŞ) and French oil major inked a 10-year liquefied natural gas (LNG) agreement for delivery of 1.6 billion cubic meters (bcm) per year starting in 2027.
The deal followed a similar agreement with Shell earlier this month and accelerated the country's bid to become a regional hub for the fuel.
When added to pipeline imports and earlier LNG deals with Oman, ExxonMobil and Shell, the volumes give Türkiye 25 billion cubic meters of surplus gas above the country's annual consumption of 50 bcm, Energy and Natural Resources Minister Alparslan Bayraktar said.
"We can supply to European markets, particularly to the ones in south-east Europe that are in need of gas," said Bayraktar, who was in Houston to sign the deal on the sidelines of the GasTech conference.
The surplus also gives Türkiye flexibility to negotiate better terms or reduce gas dependence on Russia and Iran, as contracts with Gazprom Export and the National Iranian Gas Company expire in 2025 and 2026.
Bayraktar said Türkiye's long-term LNG agreements were "of great importance in ensuring the energy supply security of both our country and our region, increasing our resource diversity and providing flexibility to our energy supply."
"Türkiye has two goals in its gas import drive: to lower the import volumes from Russia and Iran. Second, Türkiye hopes to position itself as a gas supply hub ... since European buyers have not signed sufficient long-term gas contracts," said Professor Brenda Shaffer, an energy expert at the U.S. Naval Postgraduate School.
For Total, the deal cements a longer-term relationship with BOTAŞ after a first LNG contract to supply 1.2 million metric tons annually (mtpa) from 2020 to 2023.
"This agreement enables us to secure long-term sales and reduce our exposure to spot market gas price fluctuations," said Gregory Joffroy, Senior Vice President of LNG at TotalEnergies.
It also furthers Total's strategy to build integrated gas and power businesses in growth markets.
Türkiye has had the largest demand growth of all OECD (the Organisation for Economic Co-operation and Development) countries from 2000 to 2020, with primary energy consumption nearly doubling and power demand increasing by 165%, according to the International Energy Agency (IEA).
Last year, TotalEnergies bought a 50% stake in Rönesans Enerji, a subsidiary of Rönesans Holding owned by Turkish tycoon Erman Ilıcak, which holds 166MW of hydroelectric assets and a pipeline of future wind, solar and battery projects.
The French major oil company is the world's third-largest LNG player, with a roughly 12% market share and a current global portfolio of about 50 million tons per year.