NOVATEK is in talks with Türkiye on liquefied natural gas supplies, though the dialogue remains at the discussion stage, company head Leonid Mikhelson said.
According to Mikhelson, Türkiye has never faced a physical shortage of LNG but that the rising cost of spot-market supplies has become a problem.
"Contracts for spot-market energy supplies are always pegged to exchange prices, which has led to significant overpayments... Even before these crises — back when the spot market was just beginning to grow — we consistently advocated for maintaining long-term contracts. I am certain that this remains highly relevant for Türkiye today",
Mikhelson said.
At the 19th Verona Eurasian Economic Forum, he added that the LNG market is not prone to overproduction, as the fuel is always in demand.
"Market reality shows that there is no such thing as an oversupply of LNG; it is a matter of price. If the price drops, LNG simply begins to displace coal. However, LNG shortages do occur—and it is precisely these shortages that drive the spikes we see in gas prices. That is what is happening this year",
he said.
On October 16, Mikhelson and Turkish Energy Minister Alparslan Bayraktar discussed cooperation in the LNG sector.
