A natural gas futures market, which will make a significant contribution to trading activities, will be opened this year within the Istanbul Energy Exchange, Energy and Natural Resources Minister Fatih Dönmez said.
Dönmez was speaking on Turkey’s efforts to ensure energy supply security and strengthen its place in energy markets in order to provide itself with better bargaining opportunities, at the Seventh Southern Gas Corridor Advisory Council meeting via videoconference in the capital Ankara.
The launching of the Natural Gas Futures Market (VGP) is set to allow natural gas to be bought and sold via futures contracts, allowing traders operating on the natural gas exchange to prepurchase and sell newly discovered Black Sea gas. This may also have a positive impact on prices, causing them to drop earlier than expected.
In September 2018, Turkey commissioned the Organized Wholesale Natural Gas Sales Market (OTSP), which had been in progress for a long time.
In recent years, long-term and oil price-indexed natural gas contracts have been replaced by short-term and flexible spot contracts. Global natural gas prices have suffered significant declines as the weight of spot trading indexed to stock market prices has increased in the natural gas markets.
In November, Russia’s Gazprom Export concluded the first deal for spot natural gas sales to the Turkish market through its electronic sales platform.
It was an important development signaling that Turkey’s goal of becoming a regional trade center is moving rapidly toward realization, officials said at the time.
Liquefied natural gas (LNG) has also had an important impact on the price fall. Turkey has sought to benefit from cheaper LNG and increased its imports while enhancing investments in the field.
With Turkey’s goal to enhance supply security in natural gas through infrastructure projects over the last few years, Dönmez said Turkey has increased the capacity of its LNG terminals.
“We have made two Floating Storage Regasification Units (FSRU) operational and nearly doubled the capacity of our current LNG terminals. During this period, our gas transmission capacity was enhanced significantly and we increased our gas storage capacity to 4.1 billion cubic meters (bcm); it is planned to reach 11 bcm by 2023. Moreover, the third FSRU facility will also be operational this year to provide further flexibility to our gas infrastructure,” he said.
