Turkey will launch its Natural Gas Futures Market (NFM) on Oct. 1 under the energy exchange, EXIST, marking a new milestone for the country's natural gas sector.

NFM will enable market participants to predict prices and minimize risks against price fluctuations, the Deputy Energy and Natural Resources Minister and Chairperson of EXIST Abdullah Tancan, told Anadolu Agency (AA) in an exclusive interview.

"When futures contracts applications start in the NFM, market participants will be able to manage their portfolios in the longer term but flexibly. Participants will be able to clarify their sale prices in advance under monthly, quarterly and yearly contracts," he explained.

Tancan expects more competitive reference prices for customers when the trading volume on the NFM increases, minimizing future risks while contributing to supply security.

In an interview with AA in June this year, Mustafa Yılmaz, head of the Energy and Market Regulatory Authority (EPDK) said Turkey's gas discovery of 540 billion cubic meters (bcm) with a market value of over $100 billion (TL 863 billion) could be open for trading under the name "Black Sea Gas Contract" in the natural gas futures market.

Tancan also echoed the possibility of trading Black Sea gas on the NFM, the first production of which is planned for 2023.

Initially, a volume of between 3 and 5 bcm is planned for production per year from the Black Sea by 2023. However, this could increase to between 15 and 20 bcm annually to reduce Turkey's gas imports by around 30%.

"Turkey’s natural gas market, with its diversified sources and production in the Black Sea, will enable the creation of a competitive reference price. We see the opening of the NFM as a milestone for our country in bringing us closer to the aim of becoming a gas trading hub," the EXIST chairperson said.

Turkey, as a highly import-dependent natural gas consumer, consumed 47.7 bcm of natural gas in 2020.

However, consumption this year is expected to increase significantly because of further use of natural gas for electricity generation due to lower output from hydropower plants as a result of drought.

Overall natural gas consumption is estimated to reach 60 bcm throughout this year.