Turkey's Botas Wins New LNG Import Licence

Turkey's state gas importer Botas has won a 30-yr licence allowing it to import spot LNG cargoes, according to data published by Turkey's state energy regulator EPDK. 

The licence runs from October 17 this year until October 17th 2048 and will replace the company's existing 10-year spot LNG import licence which expires on October 17.

The early renewal of Botas' spot LNG license suggests no immediate plans to change the state company's effective near monopoly over LNG imports. Turkey's gas market law allows for free third party access to Turkey's four LNG import terminals, two of which are owned by Botas and two by private operators, and a total of 42 private companies hold spot LNG import licences.

These include local subsidiaries of international operators such as OMV, Socar, RWE, EWE and Shell, as well as subsidiaries of Turkish companies already importing Russian gas by pipeline such as Enerco, Akfel and the Gazprom subsidiary Bosphorus Gaz and companies operating gas-fired power plants such as Enerjisa, Zorlu, Turcas, Aksa and Verbena.

The licences also allow companies to wholesale gas in the domestic market and, according to EPDK data, 12 companies did this in 2016, the last year for which full data is available.

However, actually importing spot cargoes has proved far more difficult for private companies, with only one, Egegaz, which owns the on-shore LNG import terminal at Aliaga, having made spot imports in addition to Botas. According to EPDK data, in 2016 Egegaz imported 0.253bn m³ of spot LNG, against 1.869bn m³ by Botas.

Turkish spot LNG imports by year (bn m³)

LNG imports 2016

Source: EPDK 

The main problem faced by private companies holding spot import licences has been that the main need for spot LNG is as extra peak shaving during peak mid-winter demand periods, the very period when Botas imports most of the LNG it buys through its two long term contracts with Algeria (4.4bn m³/yr) and Nigeria (1.2bn m³/yr) and extra spot cargoes, ordered in advance ahead of demand spikes, leaving little or no terminal capacity for private importers.

The problem is made worse as Botas can undercut competitors on price and there is little storage available for third parties to use during low demand periods. This situation may start to change as Turkey commissions more gas storage capacity. Turkey's state news agency Anatolia reported this week that filling has started at Botas' Salt Lake underground gas storage facility, with the aim of storing 550mn m³ by the end of 2018 and 1.2mn m³ when the second half of the facility is commissioned at an unspecified date. Botas late last year opened a tender to expand the facility to 5.4bn m³ by 2023.