Turkey seals 11 bcm Azeri gas deal and making progress on supply, minister says

© Reuters. FILE PHOTO: Turkish Minister of Energy Fatih Donmez speaks during a ceremony to mark the completion of the sea part of the TurkStream gas pipeline, in Istanbul, Turkey November 19, 2018. REUTERS/Murad Sezer

ISTANBUL (Reuters) -Turkey has sealed a three-year, 11 billion cubic metres (bcm) natural gas accord with Azerbaijan and is making "significant" progress in securing additional natural gas supply, Energy Minister Fatih Donmez said on Friday.

Turkey's record demand for natural gas this year is forcing it to step up purchases on a surging spot market as it scrambles to renew long-term contracts expiring this winter.

Donmez said the deal was for delivery of 11 bcm of gas via the Baku-Tiflis-Erzurum pipeline until end-2024, dismissing what he said were efforts to create the perception that Turkey was facing an energy problem amid a global energy bottleneck.

"As winter approaches, continuing talks on meeting the probable increase in natural gas demand are progressing positively," he said in a written statement.

"Authorities in countries from which we procure gas have declared that they will increase the gas delivered to Turkey," he said, citing the deal with Azerbaijan.

One of the largest gas importers in Europe, Turkey depends on pipeline gas from Russia and Iran, as well as Azerbaijan, and liquefied natural gas (LNG) imports from Nigeria, Algeria and spot markets.

It had four long-term import contracts expiring this year totalling 16 bcm annually.

Azerbaijan's energy minister Parviz Shahbazov told Reuters on Thursday that Azerbaijan had signed a new deal with Turkey to supply gas from its giant offshore Shah Deniz I field. Azerbaijan halted gas supplies from Shah Deniz I to Turkey in April after the contract expired.

Donmez rejected what he said where claims that Turkey was buying gas at expensive rates and he also denied reports that state energy companies Turkiye Petrolleri and BOTAS will be sold off.