Russia and Turkey are negotiating to maintain the volume of gas supplies from PJSC Gazprom as part of talks to extend two major gas supply contracts, Bloomberg reports, citing sources familiar with the situation, writes UNN.
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Contracts between the Russian gas giant and the Turkish state-owned company Botas for a total supply of up to 21.75 billion cubic meters per year expire on December 31. Russia and Turkey are negotiating to maintain the annual supply volume at about 22 billion cubic meters, sources said.
Gas market observers doubt the future of Russian gas supplies to Turkey amid growing pressure from the administration of US President Donald Trump, which demands limiting energy purchases that help the Kremlin finance the war with Ukraine. After the US sanctions against two major Russian oil companies were imposed last month, Turkish refineries began to reduce imports of Russian oil.
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Previously, Turkey resisted Western attempts to prevent it from buying Russian gas, which is mainly supplied under long-term contracts through a large pipeline network between the two countries. However, in September, Turkey agreed to conclude a number of contracts for the purchase of liquefied natural gas, including from the United States.
With gas production in the Black Sea in Turkey set to increase, it may have more gas than it needs, the publication writes.
Turkey's large market has been a lifeline for Gazprom, which has practically lost the European gas market after the war provoked the need to diversify supplies. This should give Turkey leverage to negotiate discounts when renewing supply agreements.
Last year, Gazprom supplied 21.6 billion cubic meters of gas to Turkey, according to Bloomberg's calculations based on data from the national energy regulator EMRA. These volumes made Turkey the second largest buyer of Russian pipeline gas after China, which contributed to strengthening Gazprom's financial results for the year.
For comparison, when Russian oil supplies through Ukraine to Europe stopped early in the morning on January 1, these volumes exceeded 15 billion cubic meters per year.
Gazprom's pipeline gas flows have historically dominated supplies to Turkey, the fourth largest gas market in Europe, which is almost entirely dependent on imports. Iran and Azerbaijan also provided a significant share of total imports.