Abstract
The use of natural gas in Turkey has increased by 96% in Turkey. Today, total natural gas consumption of Turkey is around 38.2 bcm per annum and Turkey produces only 690 mcm of natural gas. Accordingly, 98% of gas is imported from Russia, Iran, Azerbaijan, Algeria, and Nigeria via pipelines and LNG. Turkey’s natural gas demand is obviously dependent on imports and especially the Russian gas that meets around 45% of consumption in Turkey. Moreover, the dependency of electricity generation on natural gas in Turkey is about 47 and 51% of natural gas is used for electricity production. Although the importance of natural gas in Turkey has increased over time, the market continues to witness crucial issues in terms of natural gas policies of Turkey. This section scrutinizes the regulatory reforms, policy issues, and the evolution of market structure in the Turkish natural gas market, and the geopolitical role of Turkey between the gas-rich regions and Europe.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Currently, exploration, drilling, production, and well completion activities in the oil and gas industry of Turkey are carried out by The Turkish Petroleum Corporation (TPAO).
- 2.
Law no.4646, dated 02.05.2001.
- 3.
Incentive-based rate of return differs from the traditional rate of return model. The rate of return model guarantees some level of return on investment. Firms do not have incentives to reduce costs in this model. Incentive-based rate of return model encourages the firm to reduce its costs. Firms keep any reductions in costs for the contract duration. The Electricity Market Law gives authority to EPDK on cost-price relationships (Çetin and Oğuz 2007b). Fair rate of return refers to an ‘acceptable’ return over investment. Incentive-based rate of return regulation encourage firms to reconsider their cost during the contract period (Intven and Tetrault 2000).
- 4.
However, a recent decree in August 2011 seems to be limiting the independence of all the regulatory agencies in Turkey. See for more detailed information Decree No. KHK/649 http://mevzuat.dpt.gov.tr/khk/649.pdf.
- 5.
Other government bodies, including the Ministry of Industry and Commerce, have also some regulatory power of social regulations in the industry.
- 6.
Today’s Zaman, “Turkey Cancels Natural Gas Contract with Russia http://www.todayszaman.com/news-258670-turkey-cancels-natural-gas-contract-with-russia.html, 10.02.2011.
- 7.
According to the company web site: http://www.nabucco-pipeline.com/portal/page/portal/en/pipeline/timeline_steps.
- 8.
RWE is the largest electricity producer in Germany. RWE participated in the Nabucco consortium with an agreement signed in Vienna in 2008. Additionally, German–Austrian Bayerngas Company seeks to join the consortium as a seventh partner in 2012.
- 9.
However, there are other projects that count on the Shah Sea gas, including the ITGI discussed earlier and a new project, the Trans-Anatolia, discussed below. Additionally, increasing natural gas demand in Azerbaijan, Georgia, and Turkey is dependent on this gas (IEA 2009b).
- 10.
Received from http://www.botas.gov.tr/index.asp, 27 Nov 2011.
- 11.
Received from http://www.botas.gov.tr/index.asp, 27 Nov 2011.
References
Akçollu, Y. (2006); “Major Challenges to the Liberalization of the Turkish Natural Gas Market”, Oxford Institute for Energy Studies, NG 16, November 2006.
Atiyas, I. and M. Dutz (2005); “Competition and Regulatory Reform in Turkey’s Electricity Industry“, in (eds.) Hoekman, Bernard M. and Subidey Togan, Turkey: Economic Reform and Accession to the European Union. Herndon, VA, USA: World Bank, The, 187–208.
BOTAŞ (2009); Annual Report, BOTAŞ, Ankara.
BOTAŞ (2010); Sector Report, BOTAŞ, Bilkent-Ankara.
Çetin, T. (2010); “Institutional Change in the Turkish Energy Industry”, in (eds.) T. Çetin and F. Yılmaz; Understanding the Process of Economic Change in Turkey: An Institutional Approach, NOVA Science Publishers, NY, 2010, USA, 275–318.
Çetin, T. (2008); “Competition, Regulatory Reform and Probable Clashes during the Restructuring Process of Turkey’s Natural Gas Market”, in (Eds.) N. David and T. Michel (2008), Natural Gas Research Progress, Ch.14, Nova Publishers, NY, USA, 2008, 467–496.
Çetin, T. and F. Oğuz (2007a); “Reform in the Turkish Natural Gas Market: A Critical Evaluation” Energy Policy, Vol.35, No.7, July 2007, 3856–3867.
Çetin, T. and F. Oğuz (2007b); “The Politics of Regulation in the Turkish Electricity Market”, Energy Policy, Vol.35, No.3, March 2007, 1761–1770.
Doane, M., and Spulber, D., (1994); “Open access and the evolution of the US spot market for natural gas”, Journal of Law and Economics, Vol.37, No.2, 477–517.
EPDK, 2010. Annual Report, EPDK, Ankara.
EPDK, 2004. Annual Report, EPDK, Ankara.
Erdoğdu, E. (2011); “The Regulation of Natural Gas Industry in Turkey”, in (eds.) T. Çetin and F. Oğuz The political Economy of Regulation in Turkey, Springer, NY,145–176.
Gallick, E.C. (1993); Competition in the Natural Gas Pipeline Industry, Praeger Publishers, WestPort, CT.
IEA (2005). Energy Policies of IEA Countries, Turkey-2005 Review, IEA/OECD Paris.
IEA (2007a); Natural Gas Market Review 2007, IEA/OECD Paris.
IEA (2007b); Natural Gas Information 2007, IEA/OECD Paris.
IEA (2009a); Natural Gas Information 2009, IEA/OECD Paris.
IEA (2009b); Energy Policies of OECD Countries: Turkey 2009 Review, IEA/OECD, Paris.
IEA (2009c); Natural Gas Market Review 2009, IEA/OECD Paris.
IEA (2011a); Energy Balances of OECD Countries, IEA/OECD, Paris.
IEA (2011b); Natural Gas Information 2011, IEA/OECD Paris.
IEA (2011c); Oil, Gas, Coal and Electricity: Quarterly Statistics, First Quarter, IEA/OECD, Paris.
IEA (2011d); Energy Prices and Taxes: Quarterly Statistics, Second Quarter, IEA/OECD, Paris.
İpek, P. (2006); “The Aftermath of Baku-Tbilisi-Ceyhan Pipeline: Challenges Ahead for Turkey”, Perceptions, Vol 11, Spring 2006, 1–17.
Intven, H. and Tetrault, M., (2000); “Price regulation”, in. Intven, H., Tetrault, M. (Eds.), Telecommunications Regulation Handbook, World Bank.
Kılıç, A. M., (2006); “Turkey’s Natural Gas Necessity, Consumption and Future Perspectives”, Energy Policy, Vol.34, No.14, 1928–1934.
Mazzanti, M. R. and A. Biancardi (2005); “Institutional Endowment and Regulatory Reform in Turkey’s Natural Gas Sector Reform”, in (eds.) Hoekman, Bernard M. and Subidey Togan, Turkey: Economic Reform and Accession to the European Union. Herndon, VA, USA: World Bank, the, 209–220.
OECD (2010); OECD Economic Surveys: Turkey-2010, OECD, Paris.
Tunç, M., U. Camdalib, and C. Parmaksızoğlu, (2006); “Comparison of Turkey’s Electrical Energy Consumption and Production with Some European Countries and Optimization of Future Electrical Power Supply Investments in Turkey”, Energy Policy, Vol.34, No.1, 50–59.
Yazar, Y. (2011); “The growing role of Turkey in the EU’s security of energy supply”, European Energy Review, January 2011,
WB (2010); The Future of the Natural Gas Market in Southeast Europe, The International Bank for Reconstruction and Development/The World Bank, WA, USA.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2012 Springer Science+Business Media New York
About this chapter
Cite this chapter
Atiyas, I., Çetin, T., Gülen, G. (2012). The Reform of Natural Gas Market in Turkey. In: Reforming Turkish Energy Markets. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-0290-9_3
Download citation
DOI: https://doi.org/10.1007/978-1-4614-0290-9_3
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4614-0289-3
Online ISBN: 978-1-4614-0290-9
eBook Packages: Business and EconomicsEconomics and Finance (R0)