Towards a liberalized Turkish natural gas market: a SWOT analysis

Abstract

Turkey is currently in the process of restructuring and liberalization of its natural gas market. However, Turkish Petroleum Pipeline Corporation's (BOTAS) monopoly of more than 80% of natural gas imports, and ranging subsidized gas prices from the beginning, mainly for power generators but also for households and the industry, are among the factors preventing the formation of a fully competitive and liberal market. Hence, the primary aim of this study is to gain insight into the private sector view of the restructuring process, through a qualitative inquiry, including an industry-wide survey and a Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis. This study reveals the various internal (Strengths and Weaknesses) and external (Opportunities and Threats) factors, the degree of importance of each factor for the future of the industry, and the level of consistency between these aforementioned assessments. Based on the consensus reached among the Turkish Natural Gas industry representatives, policy recommendations are provided. Results suggest that market liberalization and increase in private sector involvement are the two strengths agreed upon. Likewise, competitive structuring is evaluated as a critical factor for transparency and efficiency, rather than being simply infrastructure-based development. In addition, the participants concur on the importance of increasing share of LNG in the total natural gas supply.