UPDATE 1-Turkey's Tupras to extend Iran oil purchase contract

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* Seeking to raise crude imports from Libya

By Orhan Coskun

TRIPOLI, Jan 7 (Reuters) - Tupras, Turkey's sole oil refiner, will extend purchases of crude oil from Iran when the company's contract expires in August but won't increase imports, Energy Minister Taner Yildiz said.

Turkey is seeking to raise crude imports from Libya, Yildiz also told reporters late on Sunday, as the country seeks to diversify supplies away from Iran which is under tough Western sanctions over its nuclear programme.

"Turkey's oil-purchase contract with Iran expires in August. This contract will definitely be extended, because Iran covers about 45 to 40 percent of Turkey's oil needs," he said during a trip to Algeria, Libya and Qatar.

"We will assess the amount of oil we purchase in August ... We will not buy more crude from Iran."

The United States in November expanded sanctions on global trade with Iran's energy and shipping sectors to ratchet up economic pressure on Tehran over its disputed nuclear programme.

The package kept in place exemptions for countries including Turkey that made significant cuts to their purchases of Iranian crude, but new sanctions are due to take effect this year.

Yildiz said Tupras, which is controlled by Turkey's biggest company Koc Holding, will continue to buy the same amount it has been under the exemption.

The United States and many of its allies accuse Iran of enriching uranium to levels used in nuclear weapons. Iran says its atomic programme is for peaceful purposes.

Turkey, which imported more than 60 percent of its oil from Iran before the sanctions in 2011, cut its Iranian oil purchases by at least 20 percent last year in order to win its exemption from the sanctions. Eight other nations were excluded as well.

Turkey is seeking to buy 10 million barrels of oil a year from Libya, from which it now purchases 7 million barrels, or 1 million tonnes, Yildiz said.

The state-run Turkish Petroleum International Company (TPIC), which explores for hydrocarbons overseas, is seeking 1 million tonnes of Libyan crude in exchange for the offshore exploration it is doing for Tripoli, Yildiz said during the trip.

Algeria will ship two additional liquefied natural gas (LNG) cargoes to Turkey in January and February and possibly a third cargo in March to help meet increased demand, Yildiz said.

Turkey normally purchases 56 cargoes of LNG from Algeria under contract and is turning to the spot market to cover higher demand during the cold winter months.

Turkey imports more than 90 percent of its oil and gas.

The most recent trade data made available showed Turkey's crude oil imports from Iran fell by more than 30 percent to 75,281 barrels per day (bpd) in October from September.

No further country-by-country data has been released by the government.

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