(Bloomberg) -- Turkey signed a 10-year liquefied natural gas supply agreement with France’s TotalEnergies SE with the option to redirect cargoes to Europe, the second such deal this month as the country accelerates its bid to become a regional hub for the fuel.
The deal for 1.6 billion cubic meters per year starts in 2027, with state-run gas company Botas able to receive some cargoes directly at US ports and others at terminals in Turkey and Europe, according to a statement.
Some of the gas also could be redirected to Egypt, according to people familiar with the matter, who asked not to be identified because the discussions aren’t public. Ankara and Cairo are holding talks on LNG cooperation following their political rapprochement, they said.
Botas has signed a string of new LNG deals this year, diversifying a supply mix that’s historically been dominated by pipeline gas from Azerbaijan, Russia and Iran. That strengthens Ankara’s hand in negotiations to renew long-term supply contracts with both Moscow and Tehran due to expire in 2025 and 2026.
The option for delivery to Europe also adds to Botas’s gas trading portfolio beyond its borders. The deal signed with Shell earlier this month included a similar clause, and last year the firm clinched small export deals with Bulgaria, Romania, Hungary and Moldova.
“We are creating a Turkish Blend by mixing gases from different sources in Turkey,” Energy Minister Alparslan Bayraktar said in the statement, adding that Botas could sign additional supply deals. “We’re now able to offer this mixture to customers in Europe, especially to countries in Southeast Europe that need gas.”
Turkey wants to leverage its location to become a gas hub on the European Union’s doorstep. It has already invested heavily in new storage and liquefied natural gas facilities as well as exploration and production in the Black Sea.
--With assistance from Selcan Hacaoglu and Patrick Sykes.
(Adds statement from second paragraph, minister’s comment in sixth paragraph.)
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