Turkey yet to announce LNG FSRU charter

Turkey may be looking to purchase an old LNG floating storage regasification unit (FSRU) ahead of this winter to increase its security of supply, but decisions regarding the purchase may not be made until the domestic political situation normalises, sources active in the Turkish gas sector said.

Turkey’s high-profile construction group Kolin is spearheading the introduction of the first FSRU on the western Aegean coast near Aliaga.

State company BOTAS had reportedly booked full capacity at the terminal, and was due to select the FSRU provider from eight offers received from international companies.

A source familiar with discussions told ICIS on Wednesday that Kolin may be looking to buy an old FSRU in time for winter.

“It’s possible that they will be looking to purchase the unit, and not just lease it, to increase energy security,” he said.

The source said BOTAS was also in talks over a second FSRU project, but not for this upcoming winter.

The number of FSRUs has grown recently as newbuilds have join the global fleet.

Additionally FSRU supply benefits from the flexibility of some providers which also employ the vessels as LNG carriers. France-based ENGIE currently has two vessels with regasification capacity, one of which is used as an FSRU in China, and the other used as an LNG carrier.

Given the length in the LNG carrier market, ENGIE could redeploy its 145,000 cubic metre GDF SUEZ Neptune as an FSRU through a sub-charter with Kolin.

US-based Excelerate has recently redeployed one of its vessel to operate as a fast-track FSRU in Abu Dhabi from this week. Nine out of Excelerate’s 10 vessels have regasification capacity but only one could potentially be available as an FSRU as early as this winter, according to ICIS LNG Edge.

Even decisions related to the charter of the first Turkish FSRU and supply of volumes may be postponed for now, as Turkey is reeling from a failed military coup in mid-July, a source close to discussions said.

The source said an upcoming meeting between Turkish and Russian presidents next week could also determine further developments on Turkey’s FSRUs.

The presidents are expected to resurrect talks about TurkStream, a 63 billion cubic metre/year pipeline, which would carry Russian gas to Turkey and further to the Turkish-Greek border for consumption in southern Europe.

The project was suspended at the end of last year when Turkey downed a Russian fighter jet that had allegedly breached its airspace.

The sheer size of the pipeline project might render FSRUs superfluous.

Nevertheless, another source active in the Turkish LNG sector said FSRUs were highly needed to increase Ankara’s leverage in its negotiations with other gas suppliers.

If completed, the FSRU will reportedly have a 22.5 million cubic metre/day send-out capacity, and will be able to accommodate Q-Max or Q-Flex sized vessels.

The Kolin/BOTAS FSRU is one of at least four offshore projects dotting Turkey’s coastline from Canakkale in the Marmara Sea down to the Mediterranean that had been in discussion.

Neither BOTAS nor Kolin could comment by publication time. aura.sabadus@icis.com