Turkey’s potential LNG deal with ExxonMobil to import 2.5 mt per year will have no impact on Russia’s gas market share in Turkey. It will not affect Moscow’s ambitious plan to build a hub for Russian gas in Turkey.
Finalizing this 10-year contract will help reduce the amount of the uncontracted LNG in the market. Every time a long-term LNG contract is signed, less LNG will be available to the spot market, leading to lower volatility.
Turkey has been in talks with ExxonMobil to ink a new LNG supply deal that would allow it to reduce its reliance on a single gas supplier, Turkish Energy Minister Alparslan Bayraktar revealed in a recent interview with the Financial Times.
Ankara is seeking a “new supply portfolio”, and the potential deal with the US energy supermajor would secure up to 2.5 million tons of LNG per annum (mtpa) under a long-term contract that could last up to 10 years.
The deal, which remains under discussion so far, could be seen as a Turkish move to diversify gas supply sources away from Russia. However, we believes that such an agreement would not have a major impact on Russia’s current role as Turkey’s biggest gas supplier.
The volumes that could be secured in a future deal with ExxonMobil will represent only a small portion of current Russian gas shipments to Turkey. We also believe that Turkey’s interest in the deal is related to its close relationship with Qatar, who is ExxonMobil partner in Golden Pass LNG, the project that should supply the LNG to Turkey.
Source: Anas Alhajji (see original and complete article)
