Natural Gas Market Licensing Regulation amended

Dünya Executive - - BUSINESS BY LAW - DUYGU TURGUT PARTNER ESIN ATTORNEY PARTNERSHI­P [email protected]

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 an 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.

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