The state-run Turkish Gas Company has secured a loan of 925 million euros ($929 million) from Germany’s Deutsche Bank to finance purchases of liquefied natural gas.

The three-year loan allows the Turkish Petroleum Pipeline Company, BOTAŞ, to purchase LNG from pre-approved suppliers in 10 countries, including the United States, Algeria and Qatar, according to a statement published by the bank.

The historical funding is guaranteed by the Turkish government and can be increased in the future, according to Bloomberg. The agreement marks the first international loan to the state-owned pipeline operator for LNG imports.

While the agreement will finance only a small part of Turkey’s gas consumption, it paves the way for similar transactions that will allow BOTAŞ to diversify the supply of the country currently dominated by Russia and Iran, according to the agency.
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The loan comes at a critical time for the company, which has been hit by high gas prices, forcing it to pass the cost on to consumers, as authorities struggle to rein in inflation that hit a 24-year high before a crucial election year.

The company said it sells gas to local consumers at 30% of the cost. The government poured more money into BOTAŞ during the first quarter than it did in the whole of 2021 to keep it going.

The company was also the largest recipient of the central bank’s $18 billion in foreign exchange sales to state firms in the first half of this year, adding to pressure on Turkey’s foreign exchange reserves.

BOTAŞ will also use the loan to purchase LNG from suppliers in Germany, France, Italy, Spain, Switzerland, Singapore and the United Kingdom.

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