Natural Gas Market Licensing Regulation Amended – April 2019

Recent Development

The Energy Market Regulatory Authority (“ Authority “) amended the Natural Gas Market Licensing Regulation (“ Regulation “), which was published in the Official Gazette No. 30737 dated April 8, 2019 and entered into force on the same date.

What’s New?

1. Electronic Application for Certain Licenses and Electronic Notification System

• Applications to the Authority for certain licenses can now be made through the electronic application system. The Authority will determine the types of licenses subject to the electronic application and the required electronic documents.
• As regulated under the notification regulations, companies are obliged to obtain an electronic notification address. Accordingly, license holders are obliged to inform the Authority of their electronic notification addresses within three months as of the effective date of the amendment. The electronic notification addresses will be obtained in accordance with the electronic notification legislation.

2. Document Submission After License Renewal Applications and Changes to the Submission Period

• If a license renewal application is accepted, the applicant is required to deposit a renewal fee within 30 days of the acceptance. The amendment requires that along with the renewal fee deposit, applicants must submit to the Authority documents evidencing that the license holder fulfills the minimum capital requirements under law. Also, the amendment increased the period for submitting the documentation from 30 days to 90 days.

3. Amendments to the Rights and Liabilities of the Import License Holders and Wholesale License Holders

• The amendment allows import license holders and wholesale license holders to make domestic sales to (i) otoCNG companies and (ii) wholesale sales (otoLNG) companies, in addition to wholesale companies, export companies, distribution companies, CNG sales companies and eligible consumers.
• Under the Regulation, prior to the Amendment, legal entities engaged in LNG import were required to obtain an import (spot LNG) license . With the amendment, (i) spot pipe gas and (ii) compressed natural gas (CNG) import activities are also included in the scope of the import (LNG spot) license . Accordingly, from now on, regardless of the type of the natural gas, companies engaged in import activities will not apply for separate import licenses for each of the natural gas types but only apply for a single import (spot) license . Therefore, the import (spot LNG) licenses will automatically be converted to import (spot) licenses within six months as of the effective date of the amendment.
• Import license holders will be obliged to provide information to the Authority about import amounts, source (seller company/country) and delivery points of the performed import activity.
• The implementation method for spot pipe gas and CNG imports will be determined by the rules and principles to be issued by the Authority.
• Natural gas procured within the scope of Import (spot) license can be sold to wholesale companies, import companies, distribution companies, eligible costumers, CNG sale companies, OtoCNG companies as well as wholesale sales (otoLNG) companies.

Conclusion

The Authority continues to demonstrate its commitment to making the license application processes easier, quicker and less costly. Companies should take into account the new procedures enacted by the amendment and follow all further of the Authority’s announcements and updates regarding import (spot) licenses.