1 / 36

NATURAL GAS SECTOR

NATURAL GAS SECTOR. A Brief Summary of the Industry The Overall Structure of the Market Conduct of the Firms in the Sector , Performance Influenced by the Structure and Conduct Policy Recommendations. INTRODUCTION. HISTORY OF NATURAL GAS MARKET. History of BOTAŞ. Established in 1974

donkor
Download Presentation

NATURAL GAS SECTOR

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. NATURAL GAS SECTOR

  2. A Brief Summary of the Industry The Overall Structure of the Market Conduct of the Firms in the Sector , Performance Influenced by the Structure and Conduct Policy Recommendations INTRODUCTION

  3. HISTORY OF NATURAL GAS MARKET

  4. History of BOTAŞ • Established in 1974 • Beginning to transport natural gas in 1987 • 9 February 1990 - monopoly power “Agreement of Natural Gas Usage” • 2 May 2001 - removing of monopoly power “Natural Gas Regulation Law (#4646)”

  5. Agreements • Turkey - Soviet Union (natural gas agreement in 14 February 1986) • Begining to import LNG from Algeria in 1994

  6. Invesments and Projects • Fedaration of Russia-Turkey Natural Gas Pipeline • Doğu Anadolu Natural Gas Pipeline System • Projects of Sivas-Mersin, Konya-İzmir Natural Gas Pipeline • Project of Underground Storage System • Project of Turkey-Greece N.G. Pipeline • Project of Turkey-Azerbaijan(Şahdeniz) N.G. Pipeline • Project of Turkey-Iraq N.G. Pipeline • Project of Turkey-Egypt N.G.Pipeline

  7. Main Statistics in Energy and Natural Gas Sector in Turkey • Amount of natural gas consumption in Turkey is 14.1 billion m³ in 2000, 22.1 billion m³ in 2003. It is supposed to reach to 31 and 43 billion m³ in 2010. • Energy consumption in Turkey in 2004 is 0.8%of the world’s consumption, and this is increased by 5.7% relative to 2003. • 60% of natural gas is used in energy sector.

  8. MARKET STRUCTURE

  9. Number & Size Distribution of Buyers and Sellers • SELLER SIDE: The structure of the market is determined by Natural Gas Market Law(#4646).[2.May.2001] Before the lawAfter the law Monopoly Try to reach of BOTAŞ competitive market

  10. ...brings the limitation on the market portion of the corporations. * At most 20% of the market portion(per a firm)

  11. Portion of public sector → decreasesPortion of private sector → increases “the monopoly natural gas market will try to reach competitive market structure through the oligopoly.”

  12. The likely firms ; • Gaz de France • Shell • BP • Gazprom • Koç grubu- Statoil • Eni

  13. BUYER SIDE: *Major 3 consumers of natural gas market; →households →industrialists →commercial firms *“Free consumer” »have a right to determine provider »cancompromisein prices and provisions

  14. Entry & Exit Conditions • Barriers to Entry →two requirements to join “the letting a contract by competitive bidding”(İHALE) 1) “import bachelor’s degree sufficiency certificate” 2) Pre-acknowledgement from the seller(firm or country)

  15. Product Differentiation Monopoly Oligopoly Some product differentiation

  16. Few sorts of the natural gas... • LNG (Liquid natural gas) • CNG ( natural gas used in the cars) • Compressed natural gas *Product differentation in service sector! → competition ads.

  17. CONDUCT

  18. Pricing Policy • Before Natural Gas Regulation Law ; BOTAŞ was the main determinator in pricing policy • After the law; price list is determined by EPDK • The automatically determined pricing system; Based on inflation and exchange rates • Imports BOTAŞ, prices BOTAŞ • Transporting BOTAŞ, prices EPDK. • Distribution EPDK, prices EPDK

  19. Effects of Price Changes of Comlements and Substitutes on the Demand of Natural Gas • Fossil sources (petroleum, coal, and natural gas ) • Increase in price of any source of energy affects prices of other sources more or less.

  20. Before the application of the law ; BOTAŞ was applying price discrimination (third degree price discrimination) Consumers 2 sub-groups Industrialists pay less consume more After 2002 ; BOTAŞ applies the same price for the whole distribution regions Disadvantage consumers( have less cost) Price Discrimination

  21. Marketing • As new companies enter the market, competitiveness will increase and new marketing stategies will be progressed

  22. Storage • Storage function is in the control of EPDK • Getting licence

  23. Distribution LAST CONSUMER HOUSE PRODUCER TRANSMITTER FIRM DISTRIBUTOR FIRM INDUSTRY

  24. Distribution DISTRIBUTOR FIRM(sale) PRODUCER HOUSE INDUSTRY DISTRIBUTER FIRM(transport) WHOLESALER TRANSMITTER FIRM

  25. PERFORMANCE

  26. Quality of natural gas and services • »Quality of natural gas:not the case that Turkey can manage since it doesn’t produce. • »Quality of services: has been improving day by day. Max. Production efficiency & high-quality service

  27. Technological Progress • The technology must be sufficient to support projects. » quality of the machine that produces goods »quality of the pipe lines that are used in transmission

  28. Allocative Efficiency Has not been achieved for many years. competition Allocative efficiency √

  29. POLICY RECOMMENDATIONS

  30. Liberalization- Direct Investments • In order to have a liberal natural gas market, it is expected BOTAŞ start to depute its contracts to the other firms gradually. • Existing and potential projects should be financed by the support of foreign and local investors in near future.

  31. CONCLUSION • establishment of BOTAŞ • N.G.R.L(#4646) BOTAŞ & EPDK • “...the monopoly market tries to reach competitive market through the oligopoly...” • Entry & exit contracts conditions

  32. CONCLUSION • Some product differentiation • Pricing BOTAŞ & EPDK • Marketing, Storage, Distribution, Technology are gradually developing processes

  33. CONCLUSION • Finally, policy recommendations (Liberalization & Direct investments)

  34. THANKS….

More Related