The Law Amending the Electricity Market Law and Other Laws numbered 7257 was published and entered into force on 2 December 2020 ("Omnibus Law"). The Omnibus Law introduced changes in the Natural Gas Market Law numbered 6464 as well ("Natural Gas Market Law"). The main amendments made by the Omnibus Law in the Natural Gas Market Law are as follows:
Introduction of Last Resort Supplier:
As per the Natural Gas Market Law, while the eligible consumers are entitled to buy natural gas via natural gas sale agreements freely from the production companies, import companies, distribution companies or wholesale companies, the non-eligible consumers are obliged to buy natural gas from the distribution companies. Unlike the Electricity Market Law clearly stating that the authorized supply companies will act as suppliers of last resort when the eligible consumer does not choose to buy electricity from other suppliers, the Natural Gas Market Law did not have such a specific provision setting forth the "supplier of last resort" qualification of the distribution companies. On the other hand, the EMRA decision numbered 4169 dated 13 December 2012, similar to the electricity market structure, sets forth that the distribution company is obliged to supply natural gas to eligible consumers that do not make a natural gas sale agreement with suppliers, without defining the distribution companies as the suppliers of last resort. The Omnibus Law, now, introduced "the supply of last resort" definition in the Natural Gas Market Law. As per the introduced definition, "Supply of Last Resort" is determined as the provision of natural gas supply by license holders authorized as per methodology established by the EMRA to the consumers that cannot be supplied with natural gas within the agreement period due to reasons such as bankruptcy of the relevant supply company, annulment of its license and/or going into default of the supplier due to the breach of its obligations within the organized wholesale natural gas sales market or towards consumers that cannot obtain natural gas supply even though they are eligible consumers. According to the provision inserted in Article 7/1 paragraph (a) of the Natural Gas Market Law, the EMRA is granted with the authority to entitle one or multiple license holder companies as supplier of last resort. The principles and procedures on the determination of supplier of last resort and prices to be applied will be determined by the EMRA. It is expected that new EMRA decisions determining suppliers of last resort and abrogating and replacing EMRA decision numbered 4169 dated 13 December 2012 to be published in the near future and clarify the new planned structure.
Mechanism that Encourages and/or Forces license holders to Purchase and Sell Natural Gas in the Organized Market:
Furthermore, the Omnibus Law, includes a provision setting forth that the EMRA may encourage and/or force certain license holders to purchase and sell natural gas in the amount or rate determined by the EMRA within the organized wholesale natural gas market in order to create a competitive environment, and that this will be regulated by a regulation.
Introduction of New LNG Specific Rules:
The Omnibus Law introduced a provision which entitles legal entities wishing to export LNG to engage in LNG transportation activity, provided that it is inserted in their export licenses and they do not make domestic deliveries.
Additionally, according to the paragraph inserted in Article 4/4 (g) regulating distribution of natural gas within cities, distribution companies may engage in natural gas distribution activities through LNG or compressed natural gas ("CNG") feeding method in regions where pipeline infrastructure shortfalls. The Omnibus Law allows distribution companies to make their own LNG or CNG facility investments. Alternatively, they may perform these activities through service procurement as well. However, distribution companies are not entitled to engage in direct sales of LNG and CNG. In case of an emergency or force majeure event, transmission and distribution networks can be fed with LNG and CNG. The Omnibus Law requires the license holders that engage in LNG and CNG activities to meet demands of transmission and distribution companies in case of emergency or force majeure events. The Omnibus Law states that the EMRA will determine the principles and procedures on this matter.
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