Türkiye on Wednesday announced a 10-year deal to receive liquefied natural gas (LNG) from French firm TotalEnergies beginning in 2027, as the country seeks to diversify its source of supplies.
The deal between Turkish state oil and gas company BOTAŞ and TotalEnergies was signed at Gastech, an industry conference in Houston, Texas.
"The 10-year-deal will start in 2027 and will deliver 16 LNG cargoes of up to 1.6 billion cubic meters per year," Energy and Natural Resources Minister Alparslan Bayraktar wrote on social media platform X.
Türkiye imports most of its gas from Russia, Iran and Azerbaijan but has made a push to diversify its long-term supply as several contracts start to expire from next year.
The deal on Wednesday marked Türkiye's fourth major LNG deal this year after it had inked agreements with Oman, U.S. giant ExxonMobil in May and British Shell.
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."
Diversifying resources is seen as an important strategy for the country's energy sector to ensure supply, and authorities have pushed for a diversified energy mix that includes nuclear energy, gas and renewables.
Imports cover nearly all of Türkiye's gas consumption needs, which last year stood at 50 billion cubic meters (bcm), but it hopes to further exploit domestic resources and become a regional gas re-exporter.
In April, BOTAŞ signed a 10-year agreement with Oman and later ExxonMobil for LNG. Earlier this month, it agreed to buy up to 4 bcm from Shell on a 10-year contract beginning in 2027.
With the latest deal with TotalEnergies, Türkiye will get half of its annual natural gas via LNG imports, Bayraktar said.
"We can supply (natural gas) to European markets, particularly to the ones in south-east Europe that are in need of gas," he said.
Türkiye has the fourth-largest natural gas market in Europe. It meets the largest part of its consumption needs with imported gas, mainly through pipelines from Azerbaijan, Iran and Russia.
Türkiye receives almost half of its gas from Russia, and it also buys LNG from suppliers such as Qatar, Nigeria, Algeria, and the United States.
However, the country also has the supply flexibility for a large part of national consumption needs with liquefied gas instead of pipeline gas if needed, with a gasification capacity of approximately 0.16 bcm LNG per day, according to Reuters calculations.
Despite relying on energy imports, the country has, in recent years, expanded the scope of exploration efforts for both oil and natural gas in a bid to curb dependency.
Türkiye has had the largest demand growth of all Organization for Economic Co-operation and Development (OECD) countries from 2000 to 2020, with primary energy consumption nearly doubling and power demand increasing by 165%, according to the International Energy Agency (IEA).
The deal with Türkiye will reduce exposure to market volatility, TotalEnergies said in a statement. "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.
For Total, the deal cements a longer-term relationship with BOTAŞ after a first LNG contract to supply 1.2 million tonnes per year from 2020 to 2023 and furthers its strategy to have natural gas reach 50% of its overall energy sales by 2030.
The French oil major 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.
Last year, TotalEnergies bought a 50% stake in Ronesans Enerji – held by Turkish tycoon Erman Ilicak – which holds 166MW of hydroelectric assets and a pipeline of future wind, solar and battery projects.