Posted by John Donovan: 5 Sept 2024
Ah, Shell. Our favorite sin stock is at it again, locking in a nice, cozy long-term LNG deal with Turkey’s state-owned BOTAŞ. In a move that totally isn’t about stuffing their already overflowing pockets, Shell has finalized a gas deal that’s going to keep the Turkish lights on for the next decade. Because who better to trust with your energy security than an oil giant with a reputation as clean as, well, the stuff they drill out of the ground?
Turkey, of course, is trying to beef up its energy independence, diversify its supply sources, and become a “regional energy hub.” Because nothing screams energy hub like cozying up to an oil company that has spent decades profiting off of environmental devastation. Shell’s Steve Hill, in his typical PR jargon, declared that the deal “demonstrates Shell’s ongoing commitment to Turkey and the critical role LNG can play in the country’s energy mix.” Ah yes, nothing says “commitment” like selling more fossil fuels while pretending you care about the energy transition.
Let’s talk flexibility. Shell’s contract is practically dripping with it—allowing them to cancel deliveries of LNG when they feel like it and divert shipments to Europe if the price is right. It’s almost like Shell gets to play choose your own adventure with this deal. But don’t worry, they’ll surely make sure Turkey gets the gas it needs… unless, of course, they can get a better deal somewhere else. And for that added sprinkle of irony, Turkey gets to use this deal to expand its gas terminals, including one in an ecologically sensitive area. But hey, what’s a little environmental destruction when Shell’s bottom line is at stake?
And let’s not forget that Shell can cancel two cargoes per year if the whim strikes them. It’s hard to imagine why Turkey or any buyer would agree to such terms, but the lure of cheap gas apparently makes people a little more… flexible with their demands. A Singapore-based market source even commented on the flexibility of this contract with a straight face, suggesting that these terms actually make it more competitive. Because in today’s world, who needs guarantees when you can just hope Shell doesn’t pull the plug on your energy?
Meanwhile, Shell’s decision to link the deal to crude oil prices on the delivered ex-ship side, and to Henry Hub prices on the free-on-board side, shows they’re keen to keep their fingers in as many profitable pies as possible. It’s almost like they don’t care where the money comes from—as long as it keeps coming.
Of course, Shell refused to comment, because why bother explaining your latest cash grab when the deal speaks for itself?
In conclusion: Shell, that glistening beacon of corporate responsibility, has secured yet another deal where they win, and the rest of us (and the environment) lose. But hey, at least Turkey’s got a shot at being an “energy hub,” right?
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