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    Turkey's Epias Launches Gas Trade

Summary

Spot gas trade has taken off, exposing Botas' position as the high-priced seller.

by: David O'Byrne

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Turkey's Epias Launches Gas Trade

Turkey's energy exchange Epias launched trading on its spot day ahead gas market September 1 as planned. The move follows the launch of test trading back in April and the sharing of market data provided by Turkey's state gas importer Botas, private importers, gas producers and other market players from the middle of July.

That data shared included data on stock volumes and physical flow in and out of Turkey's national transmission grid, capacity and reserve volumes, virtual trading and transport nomination, designed to enable potential market players to analyse how the Turkish gas market works.

Addressing the opening ceremony Turkey's newly appointed energy minister Fatih Donmez emphasised the significance of the launch of gas trading.

"This is an important step in our efforts to realise the liberalisation of Turkey's energy markets," he said adding that it was also an important step towards Turkey's goal of becoming a regional energy trading centre.

Donmez added that the expectation is that the market will lead to lower gas prices pointing out that this is what happened to Turkish power prices after Epias launched power trading in 2015.

"Some people warned that it would result in more expensive electricity, but prices have fallen from around 12 US cents/KWh then to around five cents today," he said.

Although it is still early days that appears to have been the immediate result with Epais board member Mustafa Karahan confirming to NGW that the first few days of trading had seen gas trading at slightly below the sale price of Turkey's state gas importer Botas, which imports around 80% of the gas under fixed-term import contracts and most of the spot LNG imported.

According to Karahan the first few days of gas trading had proved better than expected with 50 companies participating in the market, and 14 of them actively trading. "Currently due to low imbalances it's a buyers market with prices slightly below Botas sale price," he said.

Karahan explained that Epias' aim now is to implement a deliverable physical forward power market after which they hope to introduce gas futures trading.