Gas to Power
Journal
The gas market is not yet
fully liberalized and things still needs time, but as the government we are
committed to duplicating the efforts made when we liberalized the power market,
Turkey's deputy minister for energy and natural resources, Hasan Murat Mercan,
told a conference in Istanbul organized by Gas to Power Journal.
With the electricity draft legislation being debated in parliament, the gas legislation will need to follow suit swiftly. "Parliament needs [to] get a draft legislation finalised," he said but called for patience and pointed out that proceedings had also taken a couple of month time to revise the oil legislation.
"The problem for natural gas lies within power generation. Our policy
is to rely on local resources –solar, lignite –and there are incentives for
investors," he stressed. In contrast, gas-fired power generation projects
acquired or launched after June 2012 will no longer enjoy incentives.
Turkey aims to increase natural gas imports to cater for the country's
rising gas and power demand. However, it has proven difficult to substantially
increase gas supplies from Azerbaijan – let alone from Turkmenistan or the
Kurdish region of northern Iraq.
"Transport of hydrocarbon
resources are strategic matters, rather than economic matters. It all depends
on policy which is at times [is] nothing short of a chess game between
neighbouring countries," Mercan said.
"But despite all the political hurdles, natural gas reserves and
resources will find their way to flow and reach international markets," he
stressed, forecasting Turkey will emerge as a hub for pipeline gas transit.
Asked about the role of LNG for Turkey, he said that amid persistently high
gas price levels in Asia, LNG will always be more costly compared with pipeline
gas, so it is more like a "safety net" or fall-back position for
Turkey. The government has not put any restriction on investment in additional
LNG import capacity, "so it's the investors who will make the final
decision and there might well be an overshoot of investment in gas import
capacity," he said.
"If gas and power prices end up going down, e.g. following an increase
in gas supplies, then we might well one day need no subsidies to protect
end-customers anymore," he said, ending his speech on a positive note.
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