ExxonMobil negotiates massive LNG deal with Türkiye

Yahoo Finance carries an article about Exxon Mobil Corporation which is negotiating a significant liquefied natural gas deal with Türkiye, Caliber.Az reprints the article.

Exxon Mobil Corporation (XOM) is negotiating a significant liquefied natural gas (LNG) deal with Türkiye, signaling a strategic move by Türkiye to diversify its energy sources and reduce its dependency on Russian energy.

The deal, potentially lasting a decade, would involve Türkiye purchasing up to 2.5 million tons of LNG annually from ExxonMobil, marking a significant shift in its energy procurement strategy.

This negotiation is part of Türkiye’s broader initiative to build a new supply portfolio to decrease its reliance on any single energy partner. The move comes at a critical time when Russian energy exports to Europe are declining due to the ongoing conflict in Ukraine, prompting European nations to look for alternative energy sources.

Türkiye, which has limited domestic oil and gas reserves, heavily depends on imports, primarily from Russia, Azerbaijan and Iran, supplemented by LNG imports from Algeria, Qatar, the United States and Nigeria. The potential agreement with ExxonMobil is poised to enhance Türkiye’s energy security and supply stability.

Financially, 2.5 million tons of LNG under discussion would represent approximately seven per cent of Türkiye’s total natural gas consumption based on 2023’s figures, with an estimated current market value of $1.1 billion. Previously, Türkiye has engaged in spot market transactions, notably importing five million tons of LNG from the United States last year.

While the specifics of the commercial terms with Türkiye are still under discussion, ExxonMobil confirmed initial talks with the Turkish government regarding potential LNG opportunities, although details of their commercial strategy remain confidential.

The deal could play a pivotal role in reshaping Türkiye’s energy landscape, providing a more diversified and secure energy mix, while also bolstering ExxonMobil’s position as a leading global LNG supplier.

ExxonMobil has ambitious expansion plans for its LNG operations, aiming to boost its portfolio to 40 million tons annually by 2030, a significant increase from its 2020 levels. Part of this expansion includes the development of the Golden Pass LNG export terminal on the US Gulf coast, which boasts a capacity of more than 18 million tons per year and is expected to commence operations in early 2025.

Additionally, XOM is developing LNG projects in Papua New Guinea and Mozambique, further illustrating its commitment to growing its LNG business globally.