Currently, the importance of the Liquefied Natural Gas
("LNG") has come to the fore with the discussions
concerning the probable problems in natural gas import to the
Europe due to the Crimean Crisis. According to the experts'
opinion, the LNG import to the Europe may increase in the near
future depending on the decrease of the natural gas import. In
brief, the LNG plays an essential role as an energy resource.
LNG import in Turkey
LNG import has been enabled in Turkey within the frame of the
amendment on the Natural Gas Law in 2008. As is known, the LNG is
regarded as an alternative energy resource to the natural gas and
provides advantages such as its harmfulness to the environment and
ease of its handling and storage. LNG import has been regulated as
a market activity by the Natural Gas Market License Regulation and
Natural Gas Market Law. Accordingly, the import, storage and trade
of the LNG is subject to specific licenses and permits. Pursuant to
the Natural Gas Market Law, these market activities may be operated
by private sector companies within the scope of opening of the
natural gas market to competition. License application processes
have been set forth by the Natural Gas Market License
Turkey supplies its LNG mainly from Nigeria and Algeria.
According to the statistics of the Energy Market Regulatory
Authority ("EMRA"), 7.862 million cubic meter of LNG have
been imported in 2012 which corresponds to 17 % of the total
natural gas import of Turkey. Even if the natural gas market has
been opened to the competition, LNG import activities have been
operated by BOTAŞ to a large extent.
Why operate in LNG sector?: LNG incentives
There are several facilities for LNG license applications
provided by the recent Natural Gas Market Law. For example, the
license application evaluation process takes 30 days for LNG import
license applications whereas this term has been regulated for
natural gas import license applications as 60 days. Moreover, the
spot LNG import has also been supported with increase of license
requirements. Pursuant to the Natural Gas Market Law and License
Regulation, storage capacities, information and guarantee regarding
the imported natural gas, capacity to contribute to the national
transmission system are not required for spot LNG import license
applications and spot LNG import license provides the possibility
to the license owners operate with one license in more than one
Not only above mentioned facilities, but there have also been
financial incentives proposed about LNG plants in 2013 in order to
increase the LNG investments in Turkey. In the event that these
incentives are regulated by the New Natural Gas Market Law, the LNG
storage facility investor will be entitled to obtain LNG from this
facility as much as he/she needs, the investors may benefit from
the financial incentives and these investors may determine the
tariffs of usage of the LNG plants by third parties. Currently,
these incentives have not come to the fore yet and they are
regarded as a proposal.
Incorporation of an LNG company in Turkey
It is possible that foreigners set up a company in Turkey
independent of their nationality and the company type planned to be
established. Anyone who intends to operate in LNG market shall
consider the specific requirements which have been stated in the
natural gas laws and regulations such as the terms which shall be
regulated in the articles of association, the minimum capital
amounts which have been determined for each market activity.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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