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Lobbyists help grease proposed gas deal between Louisiana and Turkey

Lobbyists for the Turkish business community are helping facilitate a proposed natural gas deal between Turkey and a Louisiana energy company.

Louisiana Natural Gas Exports Inc. of Lafayette sent a letter to the chairman of the Turkey-US Business Council (TAIK) on June 10 expressing its “strong interest” in a partnership, according to a newly disclosed lobbying filing from TAIK lobby shop Mercury Public Affairs. Former Senator David Vitter, Republican of Louisiana, is a key lobbyist on the account.

The letter to Mehmet Ali Yalcindag from CEO Ben Blanchet called for a 12-to-15 year agreement. An attached memo spells out the geopolitical underpinnings of the proposed deal, namely reducing Turkey’s reliance on imports from Russia and Iran and increasing US energy exports.

The memo adds that Louisiana Natural Gas Exports (LNGE) expects “strong support” from the International Development Finance Corporation and the Export-Import Bank of the United States. Blanchet and Mercury did not respond to requests for comment.

“As part of the proposal,” Blanchet writes, “LNGE would require long-term, secure, competitively priced access to Turkey’s LNG terminals, gas pipeline and storage facilities.”

The proposal comes at a crucial moment for both sides.

As the coronavirus epidemic continues to decimate domestic demand, US energy producers have been looking to grow their export markets. With imports accounting for 75% of its energy mix, Turkey offers a welcome alternative.

“While many European and Asian importers decreased trade with the US over the past year, Turkey followed the opposite trend and emerged as the second largest importer of US LNG in Europe and Central Asia,” David Kahn, the chief investment officer at Houston-based Valkor Energy, wrote in an April 15 piece titled “Turkey offers opportunity for US LNG” in the Petroleum Economist. “As a net LNG importer benefiting from low prices, Turkey has been steadily increasing its LNG imports over the last several years — making LNG a key part of its long-term strategy to decrease its dependence on Russia.”

Indeed, Louisiana Natural Gas Exports is also negotiating a deal with Ukraine to sell the country 5.5 billion cubic meters of natural gas every year for 20 years, Ukrainian media report. The Ukrainian government approved a memorandum on the prospect on May 27.

Turkey likewise has made diversification a key strategy. President Recep Tayyip Erdogan and Energy and Natural Resources Minister Fatih Donmez have both expressed interest in greater energy independence, especially as Russia has repeatedly shown it is ready to use its dominant position as geopolitical leverage.

“Erdogan feels justifiably exposed when Turkey’s agenda clashes with that of Russia,” US-Europe Alliance President Richard Kraemer wrote in a piece for the Middle East Institute in April, referencing the punitive trade measures Moscow enacted in 2015 after the Turks shot down a Russian fighter jet over Syria.

“Erdogan has consistently aimed for freedom in executing his foreign policy agenda,” Kramer wrote, “of which energy concerns are pivotal.”