A new amendment to mining regulations in Türkiye along with numerous energy laws adopted by the Grand National Assembly (Parliament) of Türkiye on May 2 will allow for the export of natural gas and liquefied natural gas (LNG) from the country’s newly discovered Sakarya Gas Field under long-term contracts to neighboring countries and to Europe.
Referring to the most recent law’s provisions, Sohbet Karbuz, director of oil and gas at the Mediterranean Organization for Energy and Climate (OMEC), informed Anadolu that they permit the export of a portion of Sakarya’s production as LNG as well as future discoveries.
With reference to the country’s gas imports, Karbuz explained that Türkiye needs to import gas with a right to ‘reexport’ clause.
This right to “reexport” clause has become important, particularly as 2025 will see the expiration of LNG contracts through the Blue Stream pipeline of 16 billion cubic meters and 10 billion cubic meters under an Iranian contract in 2026.
‘If these contracts are to be renewed, it is necessary to get the right to reexport. When the contracts are negotiated, a similar issue should be raised for Azerbaijani gas,’ he said.
Karbuz also advised that the ‘final delivery point’ clause in the long-term LNG contracts regarding imports to Türkiye should also be reviewed to allow Türkiye to participate in LNG trade.
‘If this is done, it will undoubtedly be an advantage for Türkiye because Türkiye, which is an important actor in the global LNG market, has not engaged in LNG trade as far as I have been informed so far,” he said.
According to Karbuz, this clause will be important for Türkiye in the face of an anticipated rise in gas trade over the coming years to allow Türkiye to transform from a current passive actor to an active participant in LNG trade.
To this end, he advocated for establishing an LNG export facility that would require financing and technology, both of which could benefit from foreign investment and collaboration.
‘If we succeed in establishing such a facility, we can sell the surplus gas we produce and export to foreign markets when market conditions are favorable,” he said.
Such exports will most likely take place on the spot market considering the current import contracts, he said. He added that normal market dynamics would apply in that any LNG cargo would go to the market that offers the best price, be it Asia or Europe.
At this stage, however, it is not clear how much and when Black Sea gas can be exported.
Karbuz predicts that future market conditions and the consumption-production balance will answer these questions.
He said that “if the price margin is in our favor, the export option will come to the fore.” Regardless, he said that consideration should be given to the fact that an LNG export facility can only be built in at least three to five years, leaving the option of LNG export in the short term out of the question.
However, the reexport of purchased LNG is an option given the new legal amendment, which he described as “very important in terms of paving the way for the private sector and establishing a more free, competitive and liberal market mechanism.’
– ‘LNG liquefaction terminals can take three to five years to build’
Ana Maria Jaller-Makarewicz, an energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), stated that if Türkiye’s natural gas consumption decreases and its production in the Black Sea increases, the quantity of gas destined for Europe may increase, in accordance with European demand.
Jaller-Makarewicz recommended that Türkiye’s neighbor Bulgaria, which has reduced its natural gas consumption, could facilitate LNG exports from Türkiye as its utilization rates in its LNG terminals are low, at about 27% in 2023.
Nevertheless, she cautioned about investing in costly LNG liquefaction terminals, which can take between three and five years to build. She said that as European demand remains uncertain, having fallen by 20% over the past two years, export terminals could struggle to achieve final investment decisions and secure long-term contracts.
Furthermore, LNG demand is expected to peak by 2025 and decline by 2030 due to high energy prices, energy security and climate policies.
Tom Marzec-Manser, head of global gas analysis at ICIS, which serves commodity markets, similarly warned against investing in time-consuming and costly projects to convert piped gas into LNG for commercial shipments.
Instead, he suggested that Türkiye send excess piped gas to Europe at competitive rates marketed to various gas companies.
Robert Rozansky, a research analyst at San Francisco-based think tank Global Energy Monitor (GEM), said this year could see a peak in Europe’s LNG consumption, with a more competitive market environment with new liquefaction projects coming online.
