Turkey, which has emerged as a leader in the energy sector, has completed its work to establish a natural gas energy stock exchange that will start trading operations on Sept. 1. Aiming to become a natural gas trading hub with this step, Turkey will also play an active role in pricing.
Having taken important steps of being an energy hub in the region with the Trans-Anatolian Natural Gas Pipeline (TANAP), which recently brought Azerbaijani gas to Turkey, and the oil-gas explorer vessel Fatih, Turkey is now establishing a natural gas energy stock exchange. With the natural gas market actively commissioned, an important step will be taken towards the pricing of natural gas at accessible markets and Turkey's goal of becoming a regional natural gas trading hub.
The Energy Market Regulatory Authority (EMRA) has recently updated the Organized Natural Gas Wholesale Market Operation Procedures and Principles (PUE), which can be regarded as the rules of trade in the natural gas stock exchange, are an important step in the direction of Turkey's goal in becoming a natural gas trade center in the region.
The natural gas stock exchange, called the Natural Gas Continuous Trading Platform (STP), was launched virtually on April 1, 2018. During the virtual application, the system was heavily tested by natural gas supply license holders. In addition, under the supervision of EMRA, scenario studies were carried out with Petroleum Pipeline Corporation (BOTAŞ) and Turkey's Energy Stock Exchange (EPİAŞ) and contracts were drafted. In accordance with the purpose of the virtual application, some problems encountered during these studies and other issues identified, necessitated the revision of some of PUE's articles. BOTAŞ, EPİAŞ and market players' views were taken, and the issue was taken to board in order for the stock market to operate in a healthy and smooth manner.
With this last amendment, the rules of trade and the rights and obligations of the parties that will carry out transactions in this platform will be clarified in order to ensure that the stock exchange, which will commence formal operations on September 1, 2018, can operate smoothly. The platform, to be operated by EPİAŞ, will be used by natural gas suppliers and exporters who want to trade natural gas, as well as BOTAŞ to supply natural gas to balance the transmission system. The trading on the stock exchange will be 24 hours a day, 365 days a year, and also provide the foundation for the Daily Reference Price (DRP).
With the decision of EMRA, the Protocol on Reconciliation of Imbalances and transaction fees for the Reconciliation of Imbalances were defined within the scope of the regulations made for the natural gas market, while arrangements were made to prevent market participants from matching their offers. In addition, the imbalance charges determined within the natural gas transmission network operation regulations were added to the formulas, and additions were made to the definitions of transaction limits.
Financial matters, billing, advances, payments, notifications of insolvency were added in this regard, along with the resulting arrangements for the formulas in the simulation process.