Gas Market is Changing the Root

Its groundwork legislative tasks completed by the Energy and Natural Resources Ministry, the cluster of  fresh arrangements, amendments  and updated revisions pertaining to the Natural Gas Law was conveyed to the Prime Ministry for eventual submission to the Council of Ministers for processing, due action and subsequent approval. According to the information received on its scheduling and contents, the arrangements, amendments and revisions,  incorporating also modified rules and regulations, will be taken up for consideration by the Council of Ministers during the course of the next week, as its scope is anticipated to feature a plethora of sector-focused topics and issues, such as the status of the supplier of last resort in the natural gas market, organized natural gas wholesale markets, international interconnection facilities, the introduction of an obligation for the licensor companies to conclude written agreements, contracts and covenants, the outline of the balancing and settlement market, LNG terminal operations, the free/eligible consumers, sanctions, fines and levies, tariffs, supply security, mandatory stipulation for storage plants and facilities, the segregation and disengagement of Botaş’s activities and its split into three entities, Botaş’s purchase-and-sale contracts, the privatization model considered and to be employed for İGDAŞ and adoption of incentives and subsidies for and encouragement of LNG investment projects.

Specifically, the legislative study attempts to regulate and govern the LNG terminal operations and their plausible management, as it encourages this type of operations and management by means of freeing the tariffs with the ultimate quest of alleviating the supply-demand incompatibility and discrepancy that arises on a seasonal basis, owing to the fact that Turkey’s natural gas storage capacity is insufficient.

In addition, with respect to the demand for the privatization of İGDAŞ, the draft authorizes and assigns the Istanbul Metropolitan Municipality as the proprietary owner, and mandates the Privatization Administration (“PA”) for the operational aspect of the sell-off procedures and the infrastructure for public offering functions. Furthermore, the arrangement foresees a tariff for İGDAŞ, expressed in the U.S. currency for a period of 10 years.

“(BOTAŞ) A transparent accounting separation is adequate” Providing an insight into the underlying elements of the subject, Energy Investments Specialist Cengiz Güneş stressed the necessity that the market-relevant arrangements, amendments and revisions should fully grasp and align with the current traits on the markets and should never fall behind or prove outdated or obsolete in regard to the actual situation prevalent across the markets. Once again underscoring the crucial point that the pending arrangements, amendments and revisions should be conducive to enable the natural gas markets to operate in a competitive environment, Güneş continued to elaborate on the topic with the following revelations: “There is no doubt that restricting the Botaş share in respect of the market considerations and dynamics, the launch of the balancing market and the introduction of the derivative products and instruments in tandem with the transactions that will be executed on this market-place are subjects that are fervently required and long anticipated by the market participants, as complementary,  supplementary and supportive arrangements, amendments and revisions are eagerly awaited,  specifically for the efficient management of risks pertaining to the electricity market and the gas market since over half of the imported gas is utilized in the generation and production of electrical power. Glanced from this perspective, it is significant that the gas market should be eventually and steadfastly articulated to the EPİAŞ. This is reasoned by the reality that it is rather cumbersome for the electricity market to function as desired without the appropriate operation of the gas market.”