Turkey’s first publicly-owned floating liquefied natural gas vessel to complete first transfer

Ertugrul Gazi, a state-owned Turkish liquefied natural gas (LNG) storage and regasification vessel, will complete its first ship-to-ship LNG transfer today.

The vessel is intended to satisfy the annual household energy consumption of approximately two million people. A major energy importer, Turkey has sought to diversify its natural gas infrastructure in recent years.

A plurality of Turkish gas imports originates from state-owned pipelines in Russia, with which Turkey retains long-term energy import contracts. Yet, ongoing tension between Moscow and Ankara and the 2020 discovery of a gas field in the Black Sea have driven Turkish interest in energy diversification. As such, the Turkish government has invested in its own LNG terminals, while also increasing LNG imports by over 40 percent in the first half of 2020.

Today’s transfer will likely serve as a demonstration of the Turkish energy sector’s increasing technical sophistication. As its import contracts with Russia expire later this year, expect Turkey to both negotiate with Russia for lower prices for future contracts and pursue accelerated gas market liberalization in the months ahead. In the medium-term, Ankara will likely continue energy diversification initiatives, further developing trade ties to foreign LNG suppliers and expanding its own domestic gas production.