Turkey Signs Unprecedented Deal with Egypt

Turkey Signs Deal with Egypt

 

Turkey Signs Unprecedented Deal with Egypt to Deploy Giant LNG Ship

Turkey has signed an unprecedented deal with Egypt, under which Cairo will deploy a giant gas ship from Ankara's fleet, a move that could transform energy relations between the two countries.

Turkish Energy Minister Alparslan Bayraktar announced that a floating storage unit for liquefied natural gas (LNG) owned by the state-owned energy company BOTAŞ will be transferred to Egypt, marking the first time such a unit from Turkey has operated abroad on a temporary basis.

The minister announced the details of the unprecedented gas deal between the two countries following his meeting with Egyptian Minister of Petroleum and Mineral Resources Karim Badawi and the accompanying delegation currently visiting Ankara.

Bayraktar stated that the meeting, which coincided with the centenary of diplomatic relations between Turkey and Egypt, resulted in the signing of two major agreements to enhance cooperation in the energy sector, marking a new milestone in Turkey's international energy cooperation.

Gas Deal

With the signing of the gas deal between Turkey's BOTAS and Egypt's EGAS, a floating storage and regasification unit (FSRU) from BOTAS's fleet will be deployed abroad for the first time. The Ministry of Petroleum did not immediately respond to a request for comment from Energy Platform regarding the duration of the vessel's charter and its arrival date in Egypt.

Birkadar stated, "This will enable the implementation of a flexible and efficient model that contributes to securing natural gas supplies for both Turkey and Egypt." He explained that the move will open a new chapter in energy relations, benefiting both countries.

A floating storage regasification unit (FSRU), or floating regasification unit, is a specialized vessel used for importing liquefied natural gas (LNG). It is capable of receiving LNG shipments, storing them as liquid, and then converting them to a gaseous state for use in national energy grids. These units are typically quick to deploy and cost-effective compared to traditional onshore regasification plants.

The Turkish unit is the fifth gasification vessel contracted by Cairo since its return to importing liquefied natural gas (LNG) more than a year ago. The state-owned Egyptian Natural Gas Holding Company (EGAS) and Höegh Evi Ltd signed a 10-year agreement to utilize the services of the Hoegh Gandria vessel.

The new vessel is scheduled to be deployed at the Sumed Port, near Alexandria on the Mediterranean coast, in the fourth quarter of 2026, replacing the Hoegh Galleon vessel currently stationed in Ain Sokhna. It is Egypt's first LNG import terminal, and its contract extends until February 2026.

Egypt also contracted the Energus Eskimo vessel, owned by the American company New Fortress Energy. The vessel is currently stationed in the Jordanian port of Aqaba and will be transferred to the port of Ain Sokhna in June 2025 under a 10-year long-term charter agreement. Egypt signed a contract for another regasification vessel, which is scheduled to arrive in the country in June or July at the latest, coming from Germany.

Technical Cooperation

In addition to the agreement for the floating gas storage vessel, Turkey and Egypt signed a memorandum of understanding to consolidate institutional cooperation in the hydrocarbon and mining sectors. According to Bayraktar, the agreement will facilitate joint efforts in strategic areas such as oil, natural gas, geothermal energy, hydrogen, and base metals.

The Turkish Energy Minister stated, "Through this agreement, we will work to increase the exchange of knowledge and technical expertise and conduct joint studies in various strategic fields."