Turkey may merge balancing, day-ahead gas bourse operations – sources

Turkey is reportedly looking to scrap plans for a self-standing gas balancing market and possibly merge operations with those of the day-ahead and intra-day gas markets, which are also under consideration, sources close to the discussions told ICIS this week.

The new framework for the operation of the day-ahead, intra-day and balancing gas markets is expected to be published on the website of the regulator EPDK in the coming days, although it is not clear whether the watchdog, or other government departments, are responsible for drafting the document.

Sources active in the market said the launch of a self-standing balancing market, which was first mooted in 2014 and repeatedly delayed, may be scrapped altogether.

Instead, the balancing market may be merged with the day-ahead and intra-day gas markets, they said.

The model could be similar to that of the UK gas market, a shipper said. Under this system, shippers out of balance at the end of the day are required to buy or sell certain quantities of gas to balance their position at the marginal system-buy or system-sell price for that day.

Sources active in the gas sector said it was unclear who is drafting the new document, noting that gas specialists who had been working on the balancing market at the regulator had been removed following a purge that resulted from a failed coup attempt in July.

Contentious issue

One of the sources interviewed this week said the balancing market had proved a contentious issue among Turkish companies.

He said the incumbent and transmission system operator BOTAS, as well as some private shippers, had expressed concerns about possible price manipulation that could occur once the balancing market was launched.

However, other private shippers had insisted that a self-standing balancing market was the prerequisite for a functional liberal market and vital to Turkey’s balancing needs, particularly during peak winter consumption.

“It’s unlikely we’re going to see a balancing market, it will be more like an exchange,” the first source said.

He added that the existing energy exchange EPIAS, which operates the day-ahead and intra-day electricity platforms, would be asked to define the operation rules for the new gas market setup.

A source close to EPIAS confirmed the news, pointing out that under the new arrangements the government would seek to merge plans for the day-ahead, intra-day and balancing gas markets. He insisted there were no specific details on how the new bourse would operate.

A third source active in the sector was more optimistic, noting the balancing market may not have been scrapped altogether.

However, he said: “As [far as] I know, [the] balancing market will not start in 2017.”

The government could not comment by publication time.

A source at the regulator did not comment. aura.sabadus@icis.com