General Principles of Licensing in Turkish Natural Gas Market
The general principles setting out the legal requirements for licensing are defined under Law No 4646 of Turkey. Accordingly, the entities to engage in market activities shall obtain a license for each activity and for each facility respectively, if the said activities are to be conducted in more than one facility, before starting operation. Any entity holding more than one license or a legal entity that conducts the same activity in more than one facility, should keep separate accounting records for each activity or facility subject to a license.
The licenses and certificates shall be granted for at least ten years and a maximum of thirty years whenever issued and the entities holding a license are obliged to keep their facilities, legal books and records available for the auditing of the Energy Market Regulatory Authority (“EMRA”) in a timely manner with all kinds of information and document required in order to perform its activities.
The provisions i) that define the groups or categories regarding real persons and legal entities which will be provided services under a license and the types of activities to be performed; ii) stating that a holder of a distribution or transmission license shall provide the real persons and legal entities with the opportunity to have an access to and the use of the system without making any discrimination between system users having equal capacity and the provisions regarding the methods to be applied in determining the pricing principles stated in the Law No 4646, iii) the pricing principles to be applied to the sale of natural gas market to the subscribers taking into consideration the requirements in the market and provisions with respect to the application of the formulas regarding the adjustments of the fees as may be necessary due to inflation and provisions with respect to auditing of the same, iv) ensuring that a license holder shall give complete and correct information to the EMRA the distribution licence holder shall procure natural gas from the most economical source, for the purposes of selling the same to subscribers and when deemed necessary, shall prove that it affected the most economical purchase, v) the rules to prevent reflection of service costs and the principles regarding measures to be applied in order to reduce the operation losses to the minimum, vi) regarding the cancellation and termination of a license, vii) regarding the amendment to a license, viii) regarding the fees payable by a license holder to the EMRA and the terms of such payment, ix) regarding the conditions in relation to the utilization by other persons of the facility and/or facilities owned or operated by the license holder in accordance with the purposes of the license, when deemed necessary, x) regarding the obligations of the license holder to comply with all instructions given by the EMRA, xi) regarding the activities that can be conducted within the scope of the license without the consent of the EMRA, xii) regarding which disputes related with the activities within the scope of the license shall be settled by the EMRA, xiii) regarding under which terms, conditions and circumstances the rights and obligations arising from the license shall be invalid; xiv) which will provide for the performance of service in accordance with technical requirements should be included to the licenses.
Licenses and certificates shall automatically expire at the end of their term if such term is not extended by the EMRA under the method determined in the license or certificate or upon the bankruptcy of the real person or the legal entity holding a license or certificate, and shall expire upon the approval of the EMRA in the case that the real person or the legal entity holding a license or certificate wishes to revoke from the license.