Turkey’s BOTAŞ reportedly secures $400M loan for gas bills

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Turkey’s state energy importer has secured a $400 million loan to finance its natural gas bills, a report claimed on Thursday.

The report came a day after Turkey was said to be nearing completion in talks with Deutsche Bank AG for a 1-billion-euro ($1.1 billion) loan to finance liquefied natural gas (LNG) purchases.

The loan will be used by Petroleum Pipeline Corporation (BOTAŞ) to purchase LNG from United States producers and from traders in Europe, Bloomberg News said.

The $400 million short-term loan has been secured from two local banks, Bloomberg said, citing people with knowledge of the matter who asked not to be identified because the deal is confidential.

If secured, the 1-billion-euro would mark BOTAŞ’s first loan deal for LNG purchases and is said it could pave the way for similar agreements that will allow it to diversify supplies currently dominated by Russia and Iran.

The reports come as pressure is piling up on BOTAŞ to further hike prices amid soaring global energy costs.

The government has been subsidizing a significant amount of utility bills in an effort to soften the burden of soaring consumer prices on households, but new price hikes seem inevitable due to higher energy prices.

Turkey has opted to keep prices for households steady and hike prices for gas sold to industrial facilities and power plants.

Turkey imports nearly all its energy needs. BOTAŞ has bought billions of dollars from the central bank to cover its purchases.

So far BOTAŞ has kept its gas prices to consumers and industry well below the $830 per thousand cubic meters that it is paying in April. It said its latest price increases on April 1 still left households with an effective 70% subsidy.

Since the end of 2020, BOTAŞ has hiked the price of natural gas for the industry by 568% in Turkish lira terms, according to Reuters calculations. That reflects a 49% fall in the lira against the dollar in that period on top of rising world energy prices.

The cost of Turkey’s energy imports doubled in January and February compared to last year, to reach $16.6 billion, driving the country’s trade deficit up 135%.


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