Abstract
Each market has its own specific nature driving market players and commercial relationships. To understand the market dynamics and rules governing natural gas contracts, the fundamentals of the Turkish natural gas market must be ascertained. Based on this foundation, it is possible to discuss the functioning and rules governing supply contracts, with a specific focus on the main characteristics surrounding import and wholesale contracts. The natural gas market in Turkey started its liberalization in 2001 with the enactment of the Natural Gas Market Law No. 4646. The principles, targets, and methodology put in place by the Law were incompatible with the actual market conditions. A quick review of the 20 years since the entry into effect of the Law and comparison with Turkish electricity market, which started its privatization in the same period, shows the failure to establish a liberal natural gas market in Turkey. The explanations contained in this study will, regrettably, reveal the prevention of legal evolution of natural gas supply agreements due to Turkey’s natural gas dependency on foreign sources and a failure to establish a liberal market due to BOTAŞ’s quasi-monopolistic position in the market.
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Notes
- 1.
Published in the Turkish Official Gazette dated 2 May 2001 numbered 24390.
- 2.
Published in the Turkish Official Gazette dated 11 June 2013 numbered 28674.
- 3.
In 2020, with the increased operations under the Turkish Anatolian Gas Pipeline (TANAP) project, Azerbaijan is expected to become Turkey’s leading natural gas supplier. According to the mid-year report issued by the Natural Gas Companies Association of Turkey (Gazbir), as of 30 June 2020, Azerbaijan is the leading supplier with a 24% market share, followed by Russia with 21% (Gazbir, 2020, page 2).
- 4.
In 2019, total natural gas consumption in Turkey was 45,285.50 million Sm3. Total imports were 45,211.47 million Sm3 (Energy Market Regulatory Authority of Turkey (EMRA) (2020), page iii).
- 5.
EMRA (2020), page 8.
- 6.
EMRA (2020), page ii.
- 7.
Published in the Turkish Official Gazette dated 4 February 2011 numbered 27836.
- 8.
Turkish Competition Authority, July (2012), Natural Gas Sector Report, Ankara, page 119–145.
- 9.
Other natural gas importers are Ege Gaz AŞ, Akfel Gaz Sanayi ve Ticaret AŞ, Batı Hattı Doğalgaz Ticaret AŞ, Bosphorus Gaz Corporation AŞ, Kibar Enerji AŞ, and Shell Enerji AŞ (EMRA, 2020, page 12).
- 10.
See Nalbant et al. (2020), page 5 and elsewhere.
- 11.
The Economic Policy Research Foundation of Turkey (TEPAV) (2009), page 65–68.
- 12.
Turkish Competition Authority (2012), page 22.
- 13.
Eroğlu (2010), page 142.
- 14.
Energy Community Secretariat (2015), page 27.
- 15.
Turkish Competition Authority (2012), page 15–21.
- 16.
Rzayeva (2014), page 65–68.
- 17.
EMRA set eligible consumer limit in natural gas market for (2020) as persons consuming at least 75,000 m3 of natural gas.
- 18.
Published in the Turkish Official Gazette dated 7 September 2002 numbered 24869.
- 19.
Ayrancı (2010), page 139 et al.
- 20.
For a similar analysis of electricity supply agreements, see Yavuz (2011), page 93 et al.
- 21.
Malkoçlar is one of the nine natural gas entry points to Turkey’s natural gas grid. The other entry points are Durusu, Gürbulak, Türkgözü, TANAP Seyitgazi, Marmara Ereğlisi LNG terminal, Egegaz LNG terminal, Dörtyol floating storage and regasification unit (FSRU) terminal.
- 22.
Published in the Turkish Official Gazette dated 22 April 1926 numbered 353.
- 23.
For more detailed analysis on poor performance in civil law, refer to Aral (2011), page 106–112.
- 24.
Published in the Turkish Official Gazette dated 13 October 2016 numbered 29856.
- 25.
In accordance with the provisions of Decree No. 32, contract price and other payment obligations arising from certain agreements between Turkish residents cannot be denominated in, or indexed to, foreign currency except limited exempted circumstances (such as a movable sale).
- 26.
Published in the Turkish Official Gazette dated 31 March 2017 numbered 30024.
- 27.
Rzayeva (2018), page 9.
- 28.
Published in the Turkish Official Gazette dated 14 February 2011 numbered 27846.
- 29.
Oğuzman et al. (2018), Borçlar Hukuku Genel Hükümler Cilt I, Istanbul, page 172.
- 30.
In accordance with Article 1530-(6) of the TCC, provisions stating that the debtor is not required to pay interest for late payment, or is required to pay a very small amount of interest that can be considered to be grossly unfair, are void.
- 31.
For a similar solution adopted in relation to loan agreements, refer to Kuntalp (2012), page 93–102.
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Kepkep, B. (2021). Regulation of Natural Gas Contracts. In: Eroğlu, M., Finger, M. (eds) The Regulation of Turkish Network Industries. Springer, Cham. https://doi.org/10.1007/978-3-030-81720-6_7
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