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Turkish private sector set to gain larger share of natural gas market

08 Oct 2012 12:41:59 | esgm

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The share of the Turkish private natural gas sector is expected to expand in 2013 because of a new source of supply and the release of volumes currently held by the pipeline operator BOTAŞ, a private sector representative told ICIS on the sidelines of the EIF Congress in Ankara on Friday.

A total of 1.2 billion cubic metres (Gm³)/year may be transferred to the private sector on the 6.6Gm³/year contract currently held by BOTAŞ with Azerbaijan's SOCAR, the source said. BOTAŞ has also hinted at the possibility of releasing another 4Gm³/year of Russian gas imported on the Western Line from 2013.

Additionally, Kazakhstan expects to export 0.7Gm³/year to Turkey from 2013. The central Asian country has reportedly applied to the Turkish regulator EMRA for a licence to import the volumes into the country. The source said the volumes would be fed through the Russian pipeline network connecting Kazakhstan to Russia before they are shipped to Turkey.

"I see 2013 as a milestone for the Turkish private sector," the source said. "If all these releases are enacted and we see more sources of supply, the share of the private sector in the market could be just over 30%," he said.

The volume releases are part of a programme undertaken by BOTAŞ to reduce its market share to 20% in line with the requirements of the 2001 natural gas market law.

The contract-release process has been slow because supplying countries had previously expressed a preference for negotiating directly with BOTAŞ rather than with private companies, sources have said.

However, thanks to a greater push from the Turkish government and BOTAŞ in freeing up contracts previously held by the state pipeline operator, there is growing interest from the private sector in snapping up volumes. So far a total of 10Gm³/year has been transferred into private hands and there are expectations that a further 4Gm³/year could be released from BOTAŞ's portfolio of long-term gas agreements with Russia (see EDEM 25 September 2012).

Turkey is also interested in acquiring new sources of supply, courting northern Iraq and now Kazakhstan to export some of their vast resources to its energy-hungry market where demand is expected to double to 87Gm³/year by 2023. AS

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