If this Law enters into force as drafted, the LNG import will be easier. Accordingly, an LNG importer shall fulfill the financial sufficiency requirement and most of the other requirements for importers do not have to be fulfilled. Moreover, LNG users are also regarded as independent consumers and the investors may determine the LNG plants tariffs freely. According to the related articles of this law, LNG plants which are put into operation after the entering of this law into force are exempted from the system access requirements in the Natural Gas Market Law until 2025.
The Market Situation in Turkey
Recently, Turkey has two LNG plants one of which pertains to BOTAŞ and it imports the LNG from diverse countries. The LNG market is subject to the Energy Market Regulatory Authority. Due to new regulations in the natural gas market, the LNG import has been liberalized in 2008, thereby the LNG import has been implemented by the private sector since 2009. Moreover, the LNG terminals have been brought into use by third parties within the new regulations in 2009. The LNG storage tariffs are determined by the parties according to the recent law. However, number of LNG plants is not sufficient to establish a competitive market. If the New Natural Gas Law enters into force, the increase of the number of LNG plants is expected due to the incentives for LNG terminal investments.
LNG Trade in the World
With the increase of energy consumption in the world the search of alternative energy resources comes into the fore. LNG as one of them is not a recent alternative energy resource. It has been dealt for approximately 30 years in the world. Despite the fall of trade volume of the LNG in 2012, its trade has increased since 2007. Especially the Fukushima disaster has been a factor of increase of the LNG demand and import in Japan. Japan and other several countries in Asia and also several countries in Europe use LNG in order to meet their gas demand. Recently several countries have begun and are planning to begin importing the LNG. There were more than 90 existing regasification plants in the world, several LNG terminals which have been put in operation in Israel, Singapore, India, China and Malaysia and more than 20 projects planned to be completed in coming years.
Why Invest in LNG?: Advantages and Marketing Facilities
With its advantages such as its low risk to the environment, its cost-efficiency, contribution to the diversification of energy sources and transit routes, the LNG has been a preferable alternative energy. The resource and market of LNG are not dependent on each other physically, whereas the market of petroleum and natural gas depend on their production. Accordingly, the manufacturers have the possibility to sell the LNG to diverse countries and consumers may buy the LNG from diverse sellers. Moreover, the transportation of the LNG is more advantageous for large distances compared to the pipeline transportation. An LNG manufacturer may have the possibility to supply LNG to several markets because of its storage facilities.
As a conclusion, the LNG may be regarded as a contribution to energy diversification in Turkey especially due to its advantages and increase of its use and thereby the establishment of a competitive LNG market may be expected due to the New Natural Gas Law.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.