Turkey’s Gas Transition Poses a Major Challenge to Russia and Iran’s Stronghold in Europe’s Energy Market
Turkey’s Comprehensive Strategy to Secure Half of Gas Needs Through Production and LNG Imports by 2028
Turkey’s Energy Strategy and Its Impact on Russo-Iranian Ties
Turkey is strategically positioning itself to fulfill over half of its gas requirements by the end of 2028 through enhanced local production and increased LNG imports, particularly from the United States. This shift significantly impacts the dwindling European gas market share of Russia and Iran. The United States has been actively encouraging its allies, including NATO member Turkey, to decrease their energy dependencies on Moscow and Tehran.
Strengthening Turkey’s Role as a Regional Gas Hub
By diversifying its energy supplies, Turkey aims to bolster its energy security and eventually transform into a regional gas hub. Ankara plans to re-export both its domestic gas production and imported LNG to European markets. Meanwhile, Russian and Iranian gas will continue to fuel its local consumption.
Decline of Russia’s Dominance
Russia, once the dominant gas supplier to Turkey, has seen its market share decline from over 60% two decades ago to 37% by mid-2025. This shift was accelerated after the majority of European countries halted Russian gas imports following the 2022 invasion of Ukraine.
Impending Expiration of Key Pipeline Contracts
| Supplier | Contract Volume (bcm/year) | Contract Expiry |
|---|---|---|
| Russia (Blue Stream & TurkStream) | 22 | Nearing Expiry |
| Iran | 10 | Mid-next Year |
| Azerbaijan | 9.5 | 2030 & 2033 |
While Turkey is likely to extend some contracts, it will seek more flexible terms and reduced volumes to diversify its energy sources.
Expanding Alternative Energy Sources
Turkey is rapidly expanding its energy portfolio. The state-owned company TPAO is enhancing output from domestic gas fields. Simultaneously, LNG import terminals have been expanded to accommodate increased imports from the U.S. and Algeria, with projections to exceed 26 bcm annually by 2028.
US LNG Imports Poised to Transform Turkey’s Energy Landscape
To cover half of its gas demand of approximately 53 bcm, Turkey has signed several LNG contracts with U.S. suppliers valued at $43 billion, including a landmark 20-year agreement with Mercuria. These imports are set to reduce the dependency on pipeline imports to about 26 bcm, significantly lower than the current 41 bcm contracted from Russia, Iran, and Azerbaijan.
Future of Russian Gas Supply to Turkey
Despite the transition towards LNG, Turkey continues to import Russian gas at full capacity. Russian gas remains price-competitive, allowing BOTAS, Turkey’s state-run energy company, to leverage it against other suppliers. However, analysts suggest that Turkey’s demand for Russian gas could decline in two to three years, although it is not expected to cease entirely.
Long-term Vision for Turkey’s Energy Market
Turkey’s energy minister, Alparslan Bayraktar, emphasizes the necessity of sourcing gas from diverse suppliers, including Russia, Iran, and Azerbaijan, while recognizing U.S. LNG as a more cost-effective option. Looking ahead, Turkey plans to burn Russian and Iranian gas domestically while exporting LNG and its own gas production, enhancing its role as a regional gas trading hub.
Emegypt continues to monitor these developments, reflecting Turkey’s ambition to reconfigure its energy landscape amidst geopolitical shifts.
