Türkiye is in ongoing negotiations with Russia over a deal to establish a gas trading hub, with plans for the Istanbul-based facility to potentially begin operations by 2025, according to a senior official.

Türkiye, which has announced its ambition to become a gas hub by increasing both imports and exports, is in the process of negotiating supply deals with producers and consumers.

"We have set up a strong infrastructure for a trading platform that could operate as soon as 2025 in the Istanbul Finance Center under the partnership of BOTAŞ and Gazprom," Energy and Natural Resources Minister Alparslan Bayraktar said in an interview with Turkish daily Milliyet published on Friday.

"We sent (Russia) a memorandum of understanding," Bayraktar said, adding that Russian President Vladimir Putin told his Turkish counterpart Recep Tayyip Erdoğan that he'd give instructions to Gazprom for the gas hub.

"There will be an Istanbul Gas Index. That means gas prices will be determined in Istanbul ... Russia will sell its gas with a price based on the Istanbul Gas Index," Bayraktar said.

The plan for the hub was first floated by Putin in 2022 after the Nord Stream pipeline explosions. Russia seeks to replace lost sales to Europe, supporting Ankara's long-held desire to function as an exchange for the energy-starved countries.

Russia in 2022 proposed setting up a gas hub in Turkey to replace lost sales to Europe, playing into Ankara's long-held desire to function as an exchange for energy-starved countries.

Russia's gas exports have been severely curtailed after European countries imposed an embargo after Moscow launched its invasion of Ukraine in 2022.

Lower gas quantities from Russia via Ukraine brought forward Türkiye's role as a transfer facilitator in the region.

Russia currently supplies gas to Türkiye via the Blue Stream and TurkStream pipelines across the Black Sea.