- Natural Gas Projects in Turkey: Tuz Golu Project as a Pioneer
- November 26, 2013
- Law Firm: HERDEM Attorneys At Law - Istanbul Office
- Thereby and through other natural gas storage projects such as North Marmara and Deǧimenköy, the increase of natural gas storage to 10 % is planned until 2018 in Turkey.
Neccesity of natural gas storage in legal and financial aspects
As is known, the natural gas storage is a requirement with regard to legal requirements and financial consequences. According to the current Natural Gas Market Regulation No. 4646 and also the Draft of the New Natural Gas Market Regulation, the proof and guarantee of sufficient natural gas storage capacity is one of the import license requirements. However, not only legal obligations, but also financial factors play a role in necessity of development of new natural gas storage projects. Turkey's energy demand is high and it is dependent on external natural gas energy. Seasonal climate changes, interruptions in natural gas flow or natural gas supply from manufacturers and also the increase of natural gas energy demand in the market are the most important factors. In the past, industrial enterprises which are dependant on natural gas had difficulties because of problems in natural gas flow. Such problems in industry may cause decrease the competitive capacity of a country. Another result of natural gas supply problems is the increase of natural gas prices. Due to such possibilities, many countries in the world enlarge their natural gas storage capacity.
Tuz Gölü Natural Gas Storage Project at a glance
Tuz Gölü Natural Gas Project as the first natural gas storage of Turkey is conducted by BOTAS and an engineering firm from China and it is intended to provide the supply and demand balance in Turkey's natural gas market.
Important is also that BOTAS has obtained an incentive from the state in 2012 regarding the customs duty and VAT exemptions. According to the Resolution of Council of Ministers concerning state's incentives in investitions, such investments in natural gas storage are supported under certain conditions, and Tuz Gölü Project set an example for these investments.
Privilege for natural gas storage license applications
Not only the state, but also legislations in energy market give priority to natural gas storage licenses. According to amendments in Petroleum Market, Natural Gas Market and Electricity Market Regulations, in the event that the natural gas storage license of a natural gas storage license owner is expired and there are more than one natural gas storage license applications at the same time for the same region, other applications will be declined and returned. Morever, in the event that there are more than one license applications in storage and/or rafinery in petroleum market or storage license applications in natural gas market for the same region at the same time, the Energy Market Regulatory Authority decides which license applications will be processed. According to the Natural Gas Market Regulation, issuance of storage license for manufacturers is also possible under certain conditions. In such a case, the manufacturer shall operate both activities separately.
In the light of above mentioned legal and financial incentives, Tuz Gölü Natural Gas Storage Project will contribute to the natural gas market supply of Turkey especially in industry and by prevention of demand - supply disparities and through controlling of price fluctuations in natural gas market.