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An Overview of the Turkish Natural Gas Market

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Liberalisation of Natural Gas Markets

Part of the book series: The Political Economy of the Middle East ((PEME))

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Abstract

Whilst short-term changes in energy demand and the substitution of one fuel for another can be explained by energy prices and seasonal conditions by and large, long-term changes in energy sectors can be addressed by a number of diversified reasons such as countries’ deficient energy resources, openness to the development of unconventional energy resources which is presently led by developed countries, increasing energy needs mainly due to rising incomes and the provision of access to energy in poor regions of the world.

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Notes

  1. 1.

    Energy Intensity is measured by the quantity of energy required per unit output or activity.

  2. 2.

    A fixed proportion of the power to be generated (70% output of the first two units and 30% for the other two) in the Akkuyu site will be bought by TETAŞ at fixed price of US$12.35 cents/kWh on weighted average for 15 years and the rest will be sold in the open market. The Turkish government will start to be paid 20% profit after 15 years (IAEA 2015).

  3. 3.

    The World Nuclear Association details equity shares of the parties as MHI (15%), Itochu (15%), Engie (21%) and Turkish Electricity Generation Joint-Stock Company (EUAŞ) (49%); see http://www.world-nuclear.org/info/Country-Profiles/Countries-T-Z/Turkey/.

  4. 4.

    Mainly in five cities, namely Düzce, Edirne, Istanbul, Kırklareli and Tekirdağ, collectively providing 97% of the output (EMRA 2014).

  5. 5.

    Shares of companies in TANAP: SOCAR 51%, BOTAŞ 30%, BP 12% and SOCAR Turkey 7%.

  6. 6.

    Shares of companies in TAP: BP 20%, SOCAR 20%, Snam S.p.A. 20%, Fluxys 19%, Enagás 16% and Axpo 5%.

  7. 7.

    The programme comprised the import contracts with Russia (Western 1, Western 2, Blue Stream), Iran, Algeria and Nigeria. The contracts with Azerbaijan (6.6 bcm), Turkmenistan (16 bcm) and spot LNG were excluded.

  8. 8.

    Since the bidders failed to obtain the preliminary SCPs from the respective foreign suppliers, bids made towards the contracts with Iran, Nigeria and Algeria were deemed invalid, whilst the lots went out to tender as part of Russia (West-1) contract received no bids at all (Peker et al. 2007).

  9. 9.

    The prior contract transfer was made based on the fact that the gas purchaser of the contract was not directly BOTAŞ but instead a private company called “Gama Gazprom” (the name of which was later changed to Turusgaz Taahhüt, Pazarlama ve Ticaret A.Ş.) in which BOTAŞ involvement was by 35% equity (Altunsoy 2011).

  10. 10.

    The privatisation of IGDAŞ was not realised as of 2019, and it still belonged to Istanbul Metropolitan Municipality, whilst the Privatisation Administration finalised the sale of 90% shares of AGDAŞ in 2003, 100% Başkentgaz (formerly EGO) in return of US$1.162 billion in 2013 and 90% IZGAZ for US$232 million in 2009.

  11. 11.

    Eight-year fixed-tariff period did not apply to Istanbul, Ankara, Bursa, Eskişehir, Adapazarı and Izmit regions.

  12. 12.

    Only the import agreement Turkey has with Azerbaijan allows the re-exportation of imported gas (unless in the form of LNG) within an added destination clause.

  13. 13.

    These figures do not cover data that include Tuz Gölü UGS, Etki and Dörtyol FSRU inputs.

  14. 14.

    The storage rights were given to TPAO in a form of public document within the scope of 6326 Petroleum Law in 2001; however, the storage facility was handed over to BOTAŞ on 1 September 2016.

  15. 15.

    Regulation on the Basic Use and Principles of Natural Gas Underground Storage Facilities published on Official Gazette No. 27954, dated 4 June 2011.

  16. 16.

    Transport contracts are required to be signed between the TSO and import, export, wholesale and production companies, whilst delivery contracts are signed between the TSO and eligible consumers, storage and other transmission companies (if any).

  17. 17.

    Since indigenous production is reserved for the domestic demand, Iran itself imports gas cheaply from Turkmenistan and transits it to Turkey with a very high price tag (Kinnander 2010).

  18. 18.

    To deliver gas directly to Europe, the South Stream was planned to abandon the Ukrainian transit corridor completely and to have two lines with 31 bcm capacity which were to be expanded to four lines with a total of 63 bcm/yr by the end of 2020 (Dickel et al. 2014, 65).

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    Onur Demir

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Demir, O. (2020). An Overview of the Turkish Natural Gas Market. In: Liberalisation of Natural Gas Markets. The Political Economy of the Middle East. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-15-2027-3_4

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