Shell plc (SHEL) shares are trading lower in the premarket on Tuesday following the announcement of a 10-year liquefied natural gas (LNG) agreement with Turkey’s Petrol Taşıma AŞ (BOTAŞ). This agreement marks a significant step towards strengthening Turkey’s energy independence and solidifying its position as a regional gas hub.
Under the terms of the deal, Shell will supply BOTAŞ with up to 4 billion cubic meters of LNG annually, sourced from its U.S. and global portfolios. The supply will commence in 2027 and will play a crucial role in diversifying Turkey’s gas resources, reducing its reliance on pipeline gas.
Turkey’s Minister of Energy and Natural Resources, Alparslan BAYRAKTAR, highlighted the importance of diversifying supply sources to ensure competitive and affordable natural gas access for Turkish citizens and industries. He emphasized the nation’s strategic investments in infrastructure, including international pipelines, LNG terminals, and underground storage projects, to facilitate this goal.
Reuters calculations suggest that Turkey possesses the flexibility to meet a substantial portion of its national gas consumption with LNG instead of pipeline gas, thanks to a gasification capacity of approximately 0.16 bcm per day.
Shell remains committed to expanding its LNG capacity by 20-30% by 2030, as outlined during its 2023 Capital Markets Day. This agreement with BOTAŞ aligns with Shell’s broader strategy of increasing its LNG portfolio and solidifying its position in the global energy market.
In related news, Shell USA, Inc. subsidiaries recently agreed to sell their 100% stake in the Sinco pipeline system and Colex terminal to a subsidiary of Edgewater Midstream LLC, subject to regulatory approval.
Shell stock has seen a strong performance in the last 12 months, gaining approximately 16%. Investors interested in gaining exposure to the stock can consider the Macquarie ETF Trust Macquarie Energy Transition ETF (PWER) and VanEck Natural Resources ETF (HAP).
As of the last check on Tuesday, SHEL shares are down 2.40% at $69.94 in the premarket.
