The city natural gas distribution service shall be granted to the company which wins the tender announced by the EMRA within a license term to be determined by the EMRA, including the possession of the local natural gas distribution network, and taking into consideration some issues such as the development level of the city the consumption capacity and the number of users. Tenders to be announced by the EMRA for a specific city shall be announced in the Official Gazette.

The legal entities holding distribution licences are obliged to observe the provisions of the Law in relation to the distribution licence and the procedures and principles to be determined by the EMRA. The legal entity holding a distribution licence may sell the distribution facility which is under its ownership to another legal entity before the expiry of the licence term.

If a distribution company whose licence term has expired requested to renew its city distribution licence one year before the expiry of the licence term, the EMRA may grant a second distribution licence by taking into consideration the technical and economic power, the service quality of the company, its subscribers’ satisfaction and other issues to be determined. If the licence term of the licence holder is not extended based on the above reasons, the EMRA shall announce a new tender for the relevant city and grant the distribution licence to the legal entity that proposes the most appropriate bid for the operation and possession of the existing network. The price of the network shall be collected by the EMRA and be paid to the previous licence holder. The EMRA shall direct, supervise, monitor, observe the distribution activities of the distribution company having ownership, and may purchase such services from the real persons or legal entities holding a certificate that are subject to the Law, with the relevant cost to be borne by the latter when deemed necessary.

The city distribution company obtaining the distribution license from the EMRA must offer a partnership at a rate of 10% to the municipality or the municipal company within the city in which it is authorised, without the need to provide any capital. Such capital rate may be increased at a rate of maximum 10% provided that the equivalence has been paid. However, such an increase may be made only if there is no debt to the Treasury and additional credit is not requested, or after the discharging of credit debts to the Treasury; loans under the Treasury guarantee are not provided for this purpose.

In the case that the municipality or municipal company does not acquire any share or acquire shares insufficient to nominate at least one board member, the EMRA may request that the city distribution company arrange necessary regulations to enable the municipality to be represented in the board of directors and board of audit of the companies, in accordance with Article 275 of the Turkish Commercial Code No.6762.

Liabilities of the distribution companies are as follows:

  • Natural gas distribution companies shall establish a dispatch control centre for the distribution networks. However such condition shall not be required in cities where it is determined by the EMRA that the consumption capacity is insufficient.
  • Distribution companies shall be liable to connect consumers to the system if it is requested by the consumers under their liability. However, the liability to make connections shall be subject to the capacity of the system under the control of the company that enables the connection, and the consumer‘s fulfilment of requirements on its part as per by the distribution regulation and the technical and economical availability of the connection under the terms and conditions to be determined. The EMRA shall determine whether or not the connection is technical and economical, in the case of a dispute.
  • The user whose connection request is rejected shall inform the EMRA. In the event that the EMRA determines there has been a violation of the principles after the testimony of the distribution company regarding the issue, the company is obliged to comply with the Board decision regarding the issue.
  • Distribution companies may get their technical experts or supervision companies working on their behalf to control the existing internal installation or the installation built by the consumers (including houses, business places or industries) for the utilisation of natural gas. If the internal installation is not in compliance with the internal installation regulation to be published, the company may reject to supply gas or cut off the gas being supplied. The same procedures shall be applied in the event that the consumer re-applies after the appropriate re-installation. The distribution companies shall not be liable for the damages and losses which may arise from modifications made in the internal installation without permission, inappropriate and bad usage of the internal installation, usage of incorrect and broken equipment, constructing installation out of the scope of the project and the disorder of the installation.
  • The distribution companies may have license only for two cities within the country. However, that number may be increased by an EMRA decision by taking into consideration some issues such as the development level of the city, the consumption capacity and the number of users. The coverage of the designated distribution regions of the distribution companies may be rearranged by the EMRA in a way that provincial borders are not exceeded, with due consideration of the technical and economical requirements. The EMRA may divide a city into more than one distribution region, the borders of which are to be determined according to population density, and award the contract separately for each region.