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Shell to Supply LNG to Turkey, Strengthen Energy Security
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Shell plc (SHEL - Free Report) has signed a 10-year supply agreement for liquefied natural gas (LNG) with the Turkish state-owned energy firm BOTAS. Per the terms of the agreement, Shell will supply 4 billion cubic meters of LNG per annum to Turkey, starting 2027. The LNG supplied to Turkey will be sourced from the British energy major’s U.S. and global energy assets.
Before the discovery of the Sakarya gas field in the Black Sea, Turkey was heavily reliant on imported natural gas. Despite this discovery and increased capacity for oil and gas redistribution, Turkey remains a net importer of natural gas. Currently, Russia is Turkey's primary supplier, followed by Azerbaijan, Algeria, Iran and the United States. Natural gas is imported via pipelines and LNG facilities in Turkey.
LNG Supply Diversification
Turkey plans to diversify its supply of natural gas by utilizing its terminal and pipeline infrastructure. The idea is to provide natural gas to its citizens and industries at a competitive and reasonable rate. The diversification would allow the country to stabilize gas prices and ensure a more reliable energy supply.
The demand for LNG in Turkey is expected to grow with the rise in population. The deal with Shell should support its energy needs and make up for almost 8% of its current gas requirement. The deal should also help BOTAS to expand its LNG access and become a major regional gas hub.
According to Turkey's Energy and Natural Resources minister, the agreement will allow BOTAS to acquire new and critical capabilities in LNG transport. The agreement further enables BOTAS to transport the LNG received at the loading port via ships.
Turkey: A Regional Gas Hub
The deal helps provide energy security to Turkey as well as Europe. Given its advantageous location, at the junction of Asia and Europe, Turkey plans to become an energy hub by transporting gas from Russia, Azerbaijan and Turkmenistan to markets in the west.
Notably, natural gas supplies from Turkmenistan could support the Western nations in moving away from Russian gas supplies. The Turkish authorities have highlighted that natural gas from Turkmenistan could be transported to Turkey and further to Europe with Azerbaijan’s cooperation.
Turkey is trying to expand its natural gas supply not only to meet the energy needs of the country but also to generate a surplus that can be exported. Previously, in May 2024, BOTAS had inked an LNG supply agreement with ExxonMobil. Per the terms of the agreement, ExxonMobil will supply 2.5 million tons of LNG per annum to Turkey for 10 years. Turkey has also extended its previous agreements with Azerbaijan (until 2030) and Algeria (until 2027).
The country is currently exporting natural gas to many European countries, including Bulgaria, Hungary, Romania and Serbia. Its domestic gas network is also well-connected. The network runs through 81 provinces and 212 organized industrial zones.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. The company stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.
VAALCO Energyis an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
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Shell to Supply LNG to Turkey, Strengthen Energy Security
Shell plc (SHEL - Free Report) has signed a 10-year supply agreement for liquefied natural gas (LNG) with the Turkish state-owned energy firm BOTAS. Per the terms of the agreement, Shell will supply 4 billion cubic meters of LNG per annum to Turkey, starting 2027. The LNG supplied to Turkey will be sourced from the British energy major’s U.S. and global energy assets.
Before the discovery of the Sakarya gas field in the Black Sea, Turkey was heavily reliant on imported natural gas. Despite this discovery and increased capacity for oil and gas redistribution, Turkey remains a net importer of natural gas. Currently, Russia is Turkey's primary supplier, followed by Azerbaijan, Algeria, Iran and the United States. Natural gas is imported via pipelines and LNG facilities in Turkey.
LNG Supply Diversification
Turkey plans to diversify its supply of natural gas by utilizing its terminal and pipeline infrastructure. The idea is to provide natural gas to its citizens and industries at a competitive and reasonable rate. The diversification would allow the country to stabilize gas prices and ensure a more reliable energy supply.
The demand for LNG in Turkey is expected to grow with the rise in population. The deal with Shell should support its energy needs and make up for almost 8% of its current gas requirement. The deal should also help BOTAS to expand its LNG access and become a major regional gas hub.
According to Turkey's Energy and Natural Resources minister, the agreement will allow BOTAS to acquire new and critical capabilities in LNG transport. The agreement further enables BOTAS to transport the LNG received at the loading port via ships.
Turkey: A Regional Gas Hub
The deal helps provide energy security to Turkey as well as Europe. Given its advantageous location, at the junction of Asia and Europe, Turkey plans to become an energy hub by transporting gas from Russia, Azerbaijan and Turkmenistan to markets in the west.
Notably, natural gas supplies from Turkmenistan could support the Western nations in moving away from Russian gas supplies. The Turkish authorities have highlighted that natural gas from Turkmenistan could be transported to Turkey and further to Europe with Azerbaijan’s cooperation.
Turkey is trying to expand its natural gas supply not only to meet the energy needs of the country but also to generate a surplus that can be exported. Previously, in May 2024, BOTAS had inked an LNG supply agreement with ExxonMobil. Per the terms of the agreement, ExxonMobil will supply 2.5 million tons of LNG per annum to Turkey for 10 years. Turkey has also extended its previous agreements with Azerbaijan (until 2030) and Algeria (until 2027).
The country is currently exporting natural gas to many European countries, including Bulgaria, Hungary, Romania and Serbia. Its domestic gas network is also well-connected. The network runs through 81 provinces and 212 organized industrial zones.
SHEL’s Zacks Rank and Key Picks
Currently, SHEL carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are PEDEVCO Corp. (PED - Free Report) , VAALCO Energy (EGY - Free Report) and MPLX LP (MPLX - Free Report) . PEDEVCO presently sports a Zacks Rank #1 (Strong Buy), while VAALCO Energy and MPLX carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. The company stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.
VAALCO Energyis an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.