In recent years, several natural gas pipeline projects and
natural gas import opportunities have come to the force in Turkey.
After completion of the pipeline project TANAP, which is regarded
as the biggest natural gas pipeline project investment in Turkey,
approximately 6 bcm of natural gas of 16 bcm will be purchased by
Turkey and 10 bcm of this quantity will be exported to Europe.
Current gas field discoveries Leviathan, Tamar and Cyprus have
also brought new pipeline project opportunities along, such that
Turkey has the opportunity to become an energy hub. Nevertheless,
it is a debatable point if and how these projects will affect the
natural gas prices in Turkey. Despite all international natural gas
import and trading developments and even if the Turkish Natural Gas
Market Law has enabled the exercise of market activities to the
private sector companies, there are legal restraints for especially
natural gas importers which limits the natural gas import in
Natural gas importers shall supply the natural gas from
BOTAŞ (Petroleum Pipeline Corporation)
A limitation in natural gas import in Turkey is the provision of
the Natural Gas Market Law which sets forth that natural gas import
from countries in which no contracts of BOTAŞ exist, is
subject to the evaluation and permission of the Energy Market
Regulatory Board. According to the Natural Gas Market Law, the
Energy Market Regulatory Board may permit to natural gas import
from such countries by evaluation of market competition, the
obligations arising from the existing contracts and also the import
On the other hand, natural gas import from countries in that
contracts of BOTAŞ exist is not permitted to the natural gas
importers until these contracts expire. After the expiration of
these contracts, natural gas importers may sign contracts for the
same quantities as BOTAŞ imports.
Briefly, natural gas supply directly from the third countries or
from the pipelines is not allowed to the natural gas import
companies. In contrary, the domination of BOTAŞ is still
existing in the natural gas import.
Requirement of separate licenses for import and export
As is known, principally a separate license is required for each
market activity in natural gas market. This principle is also
applicable for natural gas import companies. According to the
Natural Gas Market License Regulation, a natural gas importer shall
obtain an export license in order to export the imported natural
gas abroad. Moreover, a separate import license is also required
for each import connection.
Market limit for natural gas import and sale
The legislation provides limits not only for the natural gas
import from abroad, but also for the imported and sold natural gas
quantity. Pursuant to the legislation, the natural gas which may be
imported and sold by natural gas import companies shall not exceed
20 % of the estimated natural gas consumption of the relevant year
which is determined by the Energy Market Regulatory Authority.
What has been regulated by the Draft of the New Natural Gas
Market Law in this regard?
The Draft of the New Natural Gas Market Law also regulates the
same market restrictions in import and sale of natural gas.
However, if the New Natural Gas Market Law enters into force as
drafted, 50 % of the natural gas amount which will be imported
shall be reduced from the obligations of BOTAŞ in the event
that the import company imports the natural gas from countries in
which contracts of BOTAŞ exist.
Privatisations in natural gas market: Private sector monopoly
instead of states monopoly?
Within the frame of the Natural Gas Market Law, the
restructuring and privatisation of BOTAŞ has been intended.
Pursuant to the Law, only transmission will be under monopoly of
BOTAŞ. This will have the consequence that certain natural gas
companies become dominant players in the market which may cause the
evolution of a monopoly of these private sector companies which
dominate the natural gas market currently and the obstraction of
the targeted market competition.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
On 6 October 2016, the UK's Secretary of State for Communities and Local Government, Sajid Javid, overruled local councillors on appeal and approved Cuadrilla's plans to explore for shale gas in Lancashire.
On Friday, 7th October the General Assembly of the International Civil Aviation Organisation passed a resolution, resolving to implement the world's first global regime for combatting CO2 emissions from aircraft.
Turkey's energy regulator previously ruled (decision numbered 5709, dated 30 July 2015) that a total capacity of 2,000 MW would be reserved in the period up until 2020 for wind power pre-license applicants to connect to the grid.
The WTO dispute "India – Solar Cells" concerns the Jawaharlal Nehru National Solar Mission ("National Mission"), launched in India six years ago.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).