Greater natural gas price competition and the increased share of renewables and local resources in Turkey have seen the reduction of Russia’s share of Turkey’s natural gas imports.
Statistics compiled from the Turkish Energy Market Regulatory Authority show that Russia's share of Turkey's natural gas imports decreased from 52% in 2017 to 33% in 2019.
Turkey imported 45.21 billion cubic meters of natural gas in 2019 with LNG marking a 29% share.
In 2017, Turkey imported 55.25 billion cubic meters of natural gas with LNG taking a 19.5% share.
- Russia's share falls
Russia sold 28.69 billion cubic meters of natural gas to Turkey in 2017, representing a 52% share of the country's gas import basket.
Moscow exported 23.64 billion cubic meters of natural gas to Turkey in 2018, marking a 47% share of Ankara's total gas imports.
However, last year this share decreased to 33%. Turkey imported 45.21 billion cubic meters of natural gas in 2019 out of which Russia supplied 15.19 billion cubic meters.
- Turkey avails of competitive pricing
According to experts, gas prices dropped with increased competition and the abundance of supplies on the global market.
LNG has become even more popular with consumer countries as natural gas in the spot LNG market is cheaper than prices set in long-term contracts.
Many experts believe that with the filling up of gas storage amid large LNG volumes from Qatar and the sharp decline in demand due to the pandemic, there is more possibility of gas prices in European markets dropping below zero.
As of June 2, gas storage capacities in Europe were 73.34% full compared to 60% a year ago, according to the data from the Association of Gas Storage Europe (GSE).
This week, Turkey's state-owned energy company Botas signed a deal to buy 1.2 million tonnes of LNG from French energy giant Total.
The deal between the two sides will start in late 2020 and will run for three years.
The agreement between Botas and Total can be seen as part of Turkey’s efforts to increase the share of hub-indexed LNG in energy imports.
Botas increased spot LNG purchases when global LNG prices reduced. Turkey's spot LNG imports amounted to 3.8 million tonnes in the first quarter of 2020 compared to 2.3 million tonnes for the first quarter of 2019.
The deal comes as Botas is nearing the expiry of long-term contracts with Nigeria and Algeria.
The deal with Nigeria ends in 2021 and with Algeria in 2024. A mid-term contract with Qatargas will also expire at the end of the year.
Botas' spot LNG agreements will be based on hub-linked prices instead of the oil-indexed pricing mechanism of the expiring contracts.
By Murat Temizer