Turkey secures 20-year U.S. LNG deal, signals strategic energy shift

Turkey’s state energy company, BOTAŞ has signed on 23 September a landmark 20-year agreement with Mercuria, a global energy trading group, to import liquefied natural gas (LNG) from the United States.

The deal, finalized in New York during President Recep Tayyip Erdoğan’s visit to the UN General Assembly, underscores Turkey’s ambition to diversify its energy sources and bolster ties with Washington. In addition, the agreement signed with Mercuria will support BOTAŞ’s strategy of becoming a significant player in international LNG trade.

Key details of the deal

Starting in 2026, Turkey will receive yearly approximately 4 billion cubic meters (bcm) in the form of LNG annually, totaling 70 bcm over the agreement’s duration.

The LNG will be sourced from U.S. terminals and regasified at facilities in Turkey, Europe, and North Africa.

Energy Minister Alparslan Bayraktar highlighted that the deal aims to secure and diversify Turkey’s energy supply while contributing to a $100 billion trade goal with the U.S.

In parallel, BOTAŞ signed a preliminary nine-year contract with Australia’s Woodside Energy to supply 5.8 bcm of LNG starting in 2030, primarily from Woodside’s Louisiana LNG project. This agreement further strengthens Turkey’s multi-sourced energy strategy.

Turkey’s move comes as the European Union plans to ban Russian LNG imports by the end of 2026, part of broader sanctions against Moscow amid Russia’s war in Ukraine.

In 2024, Turkey imported 50 bcm of natural gas, with 40% (20 bcm) supplied by Russia, making it the largest source, followed by Azerbaijan, Iran, and Algeria. The U.S., Turkey’s fifth-largest supplier, provided 10% of imports. With no new supply agreements signed with Russia’s Gazprom, Turkey is actively seeking alternatives to reduce dependency.

Strategic energy hub ambitions

BOTAŞ, responsible for Turkey’s oil and gas infrastructure, is driving a flexible, multi-sourced energy framework. In August, BOTAŞ secured deals in Milan for 15 bcm of gas for 2026–2028, reinforcing Turkey’s medium-term energy security. These agreements aim to enhance predictability and resilience in Turkey’s gas portfolio, positioning it as a major player in Europe’s energy landscape.

Turkey is positioning itself as a critical energy hub for Europe, leveraging its geographic position to act as a storage and distribution center for diverse gas flows. According to energy analyst Iliyan Vassilev, Turkey’s strategy involves securing discounted Russian gas (potentially 45–50 bcm annually) while increasing US LNG imports. This dual approach allows Turkey to create a highly liquid gas market, potentially offering the lowest spot prices in Europe and generating significant arbitrage profits, estimated at $750 million to $2.5 billion annually for intermediaries.

Vassilev notes that Turkey’s role as a “mixer” of gas from various sources, including Russia, enhances its geopolitical influence. For instance, Russian gas continues to flow to Bulgaria via Turkey’s TurkStream pipeline, despite the termination of Gazprom’s contract with Bulgaria’s state trader, Bulgargaz. This dynamic underscores Turkey’s pragmatic approach, balancing Western partnerships with continued engagement with Moscow.

Warming Turkey-U.S. relations?

The LNG deals coincide with improving Turkey-U.S. relations. On 22 September Turkey lifted retaliatory tariffs imposed in 2018 on U.S. goods, including passenger cars, fruit, and tobacco, signaling goodwill ahead of Erdoğan’s scheduled meeting with U.S. President Donald Trump.

Despite a strong personal rapport during Trump’s first term, bilateral ties were strained over issues like Turkey’s purchase of Russian S-400 missile systems, which led to Turkey’s exclusion from the US F-35 program in 2019.

Last week, Trump signaled a potential resolution to ongoing tensions with Turkey by announcing a planned visit of Erdoğan. In a social media post, Trump highlighted progress on multiple fronts, stating, “We are working on significant trade and military deals with President Erdoğan, including a major Boeing aircraft purchase, a substantial F-16 agreement, and ongoing F-35 negotiations, which we expect to conclude successfully.”

This mark Erdoğan’s first White House visit since 2019. U.S. officials have expressed concerns over human rights in Turkey under Erdoğan’s leadership and Turkey’s ties with Russia. Additionally, tensions between Turkey and Israel, a key U.S. ally, over conflicts in Gaza and Syria have further complicated bilateral relations.

Erdoğan has been vocal about lifting restrictions on Turkey’s access to F-35 jets, emphasizing that Turkey has already paid $1.4 billion for the aircraft. In a Fox News interview, he stated, “These restrictions are inappropriate for a strategic partnership and not the right approach.”

Turkey’s long-term LNG agreements with the US and Australia mark a strategic pivot toward diversified energy supplies and stronger Western ties.

Sources: BGNES, altanalyses.org, Daily Sabah, Reuters, Mercuria Press Office

Caption: Turkish President Recep Tayyip Erdogan (R) and US President Donald J. Trump at the beginning of the NATO Summit at the World Forum in The Hague, The Netherlands, 25 June 2025. EPA/SEM VAN DER WAL