Türkiye’s quickly growing liquefied natural gas (LNG) portfolio offers the EU a strategic opportunity to diversify energy sources and reduce reliance on Russian gas. Despite ongoing challenges, Europe should capitalize on Türkiye’s push to become a regional energy hub for mutual energy security.
Türkiye’s state-owned oil and gas company, BOTAŞ, signed a long-term deal with energy giant Shell at the beginning of September, a further sign of the country’s increasing diversification in natural gas. The contract commences in 2027 and will run for 10 years, supplying 4 billion cubic meters (bcm) of LNG annually, to be used both for domestic consumption and export. As Türkiye is still a net importer of natural gas with an annual consumption of 50 bcm, the agreement will facilitate domestic demand and alleviate ongoing dependence on Russian LNG.
The Shell deal is only a fraction of Türkiye’s recent diversification efforts. In May, BOTAŞ signed a decadelong trade deal with Texas-based ExxonMobil, which will supply Türkiye with 2.5 million tonnes (approximately 2.7 bcm) of LNG per annum. Simultaneously, Türkiye and Azerbaijan reached an agreement to export natural gas from Turkmenistan to Türkiye and Europe via the Trans-Caspian pipeline. The contract with the Algerian National Oil Company to supply Türkiye with 4.4 bcm per annum has also been extended until 2027. These deals constitute part of Türkiye’s ongoing efforts to rely on cleaner non-renewables and increase investment in the renewable sector.
Step back from Russia?
The Turkish government’s primary objective is simple: to become a regional gas hub. After the discovery of the Sakarya gas fields in the Black Sea, which are reportedly capable of meeting the energy demands of all Turkish households for the next 35 years, the new trade agreements will ensure Türkiye’s capacity to not only consume but also export significantly.
The new LNG deals will also strengthen Türkiye’s position in negotiating the conditions for other contracts. This is particularly relevant for BlueStream and TurkStream – two agreements with Russia set to expire in 2025.
While Russia remains Türkiye’s largest supplier of natural gas, at around 40% of its portfolio or 22 bcm annually, these new agreements mark clear steps toward gaining strategic leverage in the Black Sea region and reducing dependency on Russian gas. Türkiye, too, has begun domestic exploration for natural gas – they are continuing work after 710 bcm was discovered in the Black Sea in 2023 – indicating the country’s seriousness in the industry.
The sentiment of seeking alternatives to Russian gas resonates deeply with EU leaders. As Türkiye explores destinations for potential re-exports, European countries are high up on the list. While Shell’s deal is comparatively small compared to Türkiye’s other imports, it nonetheless signifies a changing environment for energy diplomacy and presents lucrative opportunities in Southern Europe and beyond.
Opportunities for Europe
An increasingly diversified Turkish gas portfolio has numerous opportunities to bolster Europe’s struggling energy sector. EU member states have routinely turned to importing LNG from Türkiye and Azerbaijan to compensate for the cessation of direct imports from Russia; however, the majority of the gas from Türkiye and Azerbaijan is Russian in origin or passes through Russian-owned pipelines. Despite this, the EU introduced sanctions targeted at Russian LNG for the first time this summer.
Currently, Türkiye exports LNG to southern Europe, primarily through the TurkStream and Trans Anatolian Natural Gas pipelines. In April 2024, Hungary signed a deal to receive gas from Turkish suppliers, adding to the beneficiaries of TurkStream including Romania, Bulgaria and Serbia. At its current capacity, pipelines can deliver LNG to Greece, North Macedonia and Bosnia-Herzegovina. However, a major challenge hampering Türkiye’s ability to grow westwards is the bottleneck in Bulgaria’s LNG infrastructure – BOTAS and Bulgargaz announced the TurkStream 2 project on Aug. 21, which will enable BOTAS to export 7 to 8 bcm annually through Bulgaria, elevated from the current 1.2 bcm.
Under this pretext, Türkiye’s quickly diversifying LNG plans should be capitalized on by European leaders. Strategic partnerships with Shell and ExxonMobil, as well as continued bilateral growth with Azerbaijan, Algeria and Oman, make the country ripe for increased European demand. Indeed, Türkiye’s drive to become a regional energy hub means BOTAŞ and President Recep Tayyip Erdoğan would be looking for partners in Western Europe.
Türkiye, too, realizes the risk of solely relying on Russian gas – illustrated by its own turbulent history with Russian state-owned Gazprom – which is why these new partnerships can mutually benefit Europe and Türkiye. While the TurkStream 2 project is set to include 40% Russian gas, that number is significantly less than the current amount funneled through Azerbaijan and Türkiye to Europe.
European leaders should pursue partnerships with Türkiye to enhance LNG imports and bolster Turkish gas infrastructure in Southern Europe. This collaboration would establish clear strategies for diversifying energy sources, providing a reliable alternative should Russian LNG supplies face further reductions in the medium to long term.
However, the reality of Türkiye’s energy positioning means that it is not necessarily dependent on Western European demand to see its regional energy hub come to fruition. While Turkish officials have frequently said that they want European guarantees of increased demand before investing further, Türkiye’s existing infrastructure in Southern Europe, as well as elementary exports to India, shows that BOTAŞ’ regional expansion is not conditional on EU-wide adoption. The European Commission’s ongoing anti-trust investigation into Bulgargaz’s access to Turkish LNG infrastructure further undermines Türkiye’s confidence in European policymakers accepting of Turkish LNG.
Nonetheless, for a Europe constricted in LNG sources – whether direct from Russia or laundered Russian gas through Azerbaijan and Türkiye – Türkiye’s diversification moves will serve to benefit Europeans, should EU policymakers decide to engage.
*Ethan Dincer is a business and geopolitics analyst specializing in the GCC and Türkiye. He is a Consultant at London Politica and a researcher at the London School of Economics.
**Emre Kanber is a political risk analyst at London Politica specializing in economic and geopolitical developments within MENA and Türkiye. He is a researcher at the London School of Economics.
