US LNG Exports to Turkey
Trade between the United States and Turkey is significant and growing. U.S. exports to Turkey include intermediate goods, high-value manufactured items, and energy and farm commodities. U.S. goods exports to Turkey in 2016 were valued at $9.3 billion, while Turkish exports to the U.S. were $8 billion, according to the US Census Bureau data. The United States has maintained a goods trade surplus with Turkey for each of the past six years.
Turkey is an increasingly important transit hub for oil and natural gas supplies as they move from Central Asia, Russia, and the Middle East to Europe and other Atlantic markets. Turkey is an important consumer of natural gas and is becoming an important transit state for natural gas. Turkey is one of the few countries in Europe where natural gas consumption continues to show strong growth. Over the last decade, Turkey has been the second country, after China, in terms of natural gas and electricity demand growth, according to the Turkish government.
In 2015, Turkey imported 1.7 Tcf of natural gas, accounting for 99% of total natural gas supply. Russia’s Gazprom is by far the largest single supplier, accounting for 56% of Turkey’s total natural gas supply in 2015. Turkey is Russia’s second-largest export market for natural gas after Germany. In 2015, BOTAŞ exported just 22 Bcf of natural gas, according to the Anadolu Agency.
Continued strong growth in US shale gas production has driven domestic prices down to a 15-year low and sparked a surge in LNG export investment interest. Turkey is expected to become a prime targets for U.S. LNG. The first LNG cargo from U.S.reached to Turkey in 2016. Turkey could be the biggest beneficiary of the U.S. LNG exports as it currently receives gas above US$12/mmbtu from Russia and above US$14/mmbtu from Iran. The long-term contracts are up for renewal in 2021 and US LNG exports can help Turkey negotiate a better deal with Iran and Russia that is closer to European spot prices.