Overview

Oil and Gas Sector

(total market size = (total local production + imports) – exports)

Units: $ millions
Source: Ministry of Energy and Natural Resources, State Institute of Statistics

Note: Above figures do not include LNG and NG Imports (just the equipment and services)

In 2022, Türkiye paid $96.55 billion – an increase of 90.5% from 2021 – for the import of mineral fuels, mineral oil, refined product, and bituminous materials.

Türkiye has long term take-or-pay agreements for natural gas (NG) arriving via pipeline from Russia, Iran, and Azerbaijan. Some of these long-term take-or-pay agreements will expire in the coming years, resulting in an increase of spot LNG imports. The GoT is also planning to liberalize the market by unbundling and privatizing the state-owned pipeline transportation company BOTAS and decreasing its share of the energy market, thus creating opportunities for private industry. Plans to liberalize, however, may run up against high NG prices and shortage of NG volumes.

Turkmenistan, Iraq, and East-Med resources are other potential sources of NG, and U.S. firms should stay abreast of related developments for export opportunities, especially for the supply of compressor equipment. Azerbaijan, Türkiye, and Turkmenistan are discussing development of infrastructure to export Turkmen gas to Europe through Türkiye.

Türkiye’s BOTAS and Bulgaria’s Bulgargaz signed an NG transfer agreement on Jan 3, 2023 to deliver up to 1.5 bcm (billion cubic meters) NG. The agreement will be valid for 13 years.

Türkiye has been supplying NG through its Turk Stream project to Bulgaria, Greece, North Macedonia, Romania, Bosnia and Herzegovina, Serbia, and Hungary. Since becoming operational in 2018, Türkiye has supplied over 18.5 bcm NG to Europe through the Trans Anatolian Natural Gas Pipeline Project (TANAP).

Natural Gas Commodity Market in Türkiye

Türkiye imported 54.66 bcma (billion cubic meters per annum) of NG in 2022, 10% of which came from the U.S. while pipeline-gas had a share of 72.25% and Liquified Natural Gas (LNG) had 27.75%. The United States supplied 37% of the LNG imported by Türkiye.

Türkiye, imports NG or LNG through long term contracts or spot, from Russia, Iran, Azerbaijan, the United States, Algeria, Egypt, Nigeria, etc. in sequence of market size. According to 2022 import statistics published by the Energy Market Regulatory Authority (EMRA), the United States was the largest exporter of LNG to Türkiye and fourth largest exporter when we include pipeline gas.

NG production in Thrace meets almost 1% of Türkiye’s demand, however Türkiye’s recent offshore NG discovery in the Black Sea, reportedly amounting to 710 bcm, is expected to meet at least 20% of demand at full production capacity in 2027.

Oil & Gas Equipment Market

The Turkish Petroleum Corporation (TPAO) has been procuring offshore drilling and production equipment for use in the Black Sea. U.S. drilling and gas production equipment manufacturers/suppliers are competitive in this area.

Türkiye plans to continue oil and gas exploration in the Black Sea and Eastern Mediterranean Sea, requiring investment in offshore oil and gas exploration vessels, drilling, and production platforms. Türkiye may make investments on floating storage and regasification unit (FSRU) vessels as well. Demand for subsea production wells and pipelines provide U.S. firms another unique export opportunity.

LNG Import Terminals and Floating Storage Regasification Unit (FSRU) Facilities

There are two LNG import terminals and three FSRU facilities in Türkiye that store, gasify, and transfer LNG from the spot market. One LNG facility and two FSRU facilities are operated by state-owned oil and natural gas transportation company BOTAS, while the other two facilities are operated by Turkish private companies. BOTAS’ newly opened FSRU facility in Saros Bay, near the Greece and Bulgarian borders, expected to deliver NG to Eastern Europe once connection pipelines are built. The first FSRU vessel for this facility arrived in February 2023.

Natural Gas Storage

MENR is targeting 20% NG storage capacity. BOTAS is increasing the existing 1.0 bcm storage capacity at the Salt Lake (Tuz Golu) to 5.4 bcm. BOTAS recently increased its NG storage capacity at the Silivri NG storage facility to 4.6 bcm. Türkiye presently has NG storage facilities (including FSRUs and LNG terminals) with 6 billion cubic meters, but capacity is expected to increase to 10 billion cubic meters in two years.

Natural Gas Distribution and Transmission

Türkiye’s main NG transmission lines are owned and operated by BOTAS. There are currently 72 NG distribution companies in Türkiye which fall under the Natural Gas Distribution Companies Association of Türkiye (GAZBIR). GAZBIR owns the Natural Gas and Energy Training Certification Inspection and Technological Service Co, Ltd. (GAZMER), accredited by the Vocational Qualifications Authority (VQA) and the Turkish Accreditation Agency, which operates to meet demand in training, research and development, laboratory requirements, and common technological needs. GAZBIR is a member of EUROGAS and the International Gas Union.

Usage of Hydrogen in NG Pipelines and Storage Facilities

A pilot project was conducted by GAZBIR-GAZMER using hydrogen in Konya’s NG distribution pipelines. Between 5% and 20% hydrogen was mixed with NG which resulted in higher pipeline distribution efficiency. The Turkish Ministry of Energy and Natural Resources (MENR) is encouraging hydrogen use in pipelines, the production of hydrogen from domestic coal, the use of green hydrogen for energy storage purposes, and the use of boron minerals to hold hydrogen.

Oil and Oil Products Commodity Market

In 2022, Türkiye’s imports of oil and oil products increased 6.94% from 2021 reaching 47.42 million tons. Türkiye’s refinery production increased 5.66 % in 2022 reaching 38 million tons. Domestic oil production in southeast Türkiye currently accounts for 7% of domestic demand.

Refineries

TUPRAS is Türkiye’s largest oil refiner with four refineries: Izmit refinery, established in 1961, has a refining capacity of 11.3 million tons; the Izmir refinery has a capacity of 11.9 million tons; the Kirikkale refinery has a capacity of 5.4 million tons; and the Batman refinery has a refining capacity of 1.4 million tons. TUPRAS has been modernizing and expanding its facilities, and U.S. firms have become suppliers of equipment and services. TUPRAS routinely issues repair, maintenance, and modernization tenders which U.S. firms are primed to procure.

Türkiye’s most recent refinery, owned and operated by SOCAR is in Aliaga, and began operating in 2019 and has an annual production capacity of 10 million tons. This refinery is integrated to SOCAR’s PETKIM petrochemical plants complex. STAR Refinery meets approximately 25% of Türkiye’s demand for processed crude oil products. It produces petroleum products such as diesel, jet fuel, LPG, sulfur, petroleum coke, and critical raw materials for the petrochemical sector. The refinery has an annual crude oil processing capacity of 11 million cubic meters.

Leading Best Prospects

• LNG supply to Türkiye
• Subsea production wells and pipelines
• Compressors and metering stations equipment
• FSRU vessels
• Green and blue hydrogen production
• NG storage equipment and services
• Refinery upgrade opportunities
• Artificial intelligence, data analytics, and automation systems for refineries

Resources

• Export-Import Bank of the United States (EXIM Bank): www.exim.gov
• U.S. International Development Finance Corporation (DFC): www.dfc.gov
• U.S. Trade & Development Agency (USTDA): www.ustda.gov
• International Finance Corporation: www.ifc.org

For further information on the energy sector, contact:

Serdar Cetinkaya

Eurasia Energy and Mining Leader

U.S. Commercial Service

U.S. Embassy, Ankara, Türkiye

Serdar.Cetinkaya@trade.gov

Automotive & Smart Mobility, Marine, Rail and Road Specialist
U.S. Commercial Service Türkiye
Naz.Demirdoven@trade.gov