Turkey’s Botas Evaluating LNG Supply Bids

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Turkish state Botas is evaluating bids for 60 LNG cargoes as it seeks 20 shipments a year between October 2021 and September 2024. Turkey is facing a crucial year in which the outcome of renegotiations over long-term deals will help shape the future of its still-to-be-liberalized gas market (LNGI Jul.17'20). A Botas LNG official said the large supply tender was yet to be concluded. Bidders are rumored to include Portugal’s EDP, Royal Dutch Shell, Total, Eni, BP, Cheniere and trading houses, says a market source. The outcome of the tender should offer traders a reasonable price reference for the market going forward. Contracts expire this year in Turkey for 18 billion cubic meters per year (1.7 billion cubic feet per day) of piped gas and LNG imports, equivalent to around 40% of total imports. Bullish Pricing Environment The tender is under evaluation as tighter global gas supply is driving spot LNG prices higher in Northeast Asia and Europe. In Europe, spot LNG prices have risen to seven-year highs following higher European hub prices. The month-ahead contract at the Dutch TTF, Europe’s benchmark hub, is trading at 13-year highs (LNGI Jun.24'21). Turkey raised residential natural gas prices by 12% and consumer electricity prices by 15% on Thursday, which together are expected to add some 0.6% directly to inflation that is already above target at 16.6%. Botas has said it would hike natural gas prices for industrial use by 20% and that used for electricity production by 20.2%. LNG Import Capacity Grows Botas commissioned on Jun. 25 its new LNG import terminal, the Ertugrul Gazi floating storage and regasification unit (FSRU), at Dortyol on the east Mediterranean coast. The Ertugrul Gazi has a regasification capacity of 28 million cubic meters per day, equivalent to roughly 7 million tons of LNG per year. It also has storage capacity of 170,000 cubic meters of LNG, equivalent to a regasified volume of 102 million cubic meters. Turkey now has two FSRUs, including the 5.7 million ton/yr Turquoise at Etki near Izmir. The Ertugrul Gazi has replaced the 4.1 million ton/yr MOL FSRU Challenger that Botas was leasing at Dortyol. The Ertugrul Gazi received its first cargo on Jun. 28 at Dortyol. Tom Pepper, London

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