Analyzing the Impact of Black Sea Gas Production on the Turkish Natural Gas Market with a Mixed Complementarity Problem Approach

Öz

Karadeniz’de gaz keşfi Türkiye doğal gaz piyasası için bir dönüm noktası olmuştur. Bu çalışmada Karadeniz gazının Türkiye doğal gaz piyasası üzerindeki etkisi bir piyasa denge modeli vasıtasıyla incelenmiştir. Bu model Türkiye doğal gaz piyasasının mevcut verileri ile çalıştırılmış ve GAMS yazılımı ile çözülmüştür. Elde edilen sonuçlara göre; küresel doğal gaz ve petrol fiyatları beklendiği gibi veya beklenenden yüksek olursa Karadeniz gazı üretimi son kullanıcı fiyatları üzerinde aşağı yönlü bir baskı oluşturacaktır. Buna karşın, eğer piyasa fiyatları beklenenin altında kalırsa, oligopol bir piyasa yapısında, Karadeniz gazı üretilmeyecektir ve doğal gaz piyasasını da etkileyemeyecektir. Bu model piyasa denge modeli vasıtasıyla bir doğal gaz üretim projesinin ekonomik analizinin yapılması boyutuyla literatüre katkı sağlamaktadır.

Anahtar Kelimeler

• Türkiye doğal gaz piyasası
• Karadeniz gazı üretimi
• piyasa modelleme
• karışık tamamlayıcılık problemi.

Analyzing the Impact of Black Sea Gas Production on the Turkish Natural Gas Market with a Mixed Complementarity Problem Approach

Öz

The discovery of natural gas in Black Sea has been a milestone for the Turkish natural gas market. This study examined the impacts of the Black Sea natural gas production on the Turkish natural gas market using a market equilibrium model, which is simulated with existing data from the Turkish natural gas market and solved using the GAMS software. The findings suggest that if global natural gas and oil prices remain as expected or stronger, Black Sea production will place downward pressure on end-user prices; however, if global market prices are lower than expected, natural gas will not be produced and will not impact the natural gas market under an oligopolistic market structure. Our model adds to the literature by offering an economic analysis of a gas production project through a market equilibrium modelling approach.

Anahtar Kelimeler

• Turkish gas market
• Black Sea gas production
• market modeling
• mixed complementarity problem.

Kaynakça

1. Abada, I., Gabriel, S., Briat, V., and Massol, O. (2013). A Generalized Nash–Cournot Model for the Northwestern European Natural Gas Markets with a Fuel Substitution Demand Function: The GaMMES Model. Network. Spatial Econ, 13(1), 1-42.
2. BP. (2020). BP Statistical Review of World Energy. https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-full-report.pdf. (Accessed: 01.02.2021).
3. Bazaraa, M.S., Sherali, H.D., and Shetty, C.M. (1993). Nonlinear Programming Theory and Algorithms, New York: Wiley.
4. Biresselioglu, M.E., Demir, and M.H., Kandemir, C. (2012). Modeling Turkey’s Future LNG Supply Security Strategy. Energy Policy, 46, 144-152.
5. Biresselioglu, M.E., Yelkenci, T., and Oz, I.O. (2015). Investigating the Natural Gas Supply Security: A New Perspective. Energy, 80, 168-176.
6. Biresselioglu, M.E, Kaplan, M.D., and Ozyorulmaz, E. (2019). Towards a Liberalized Turkish Natural Gas Market: A SWOT Analysis. Energy Sources, Part B: Economics, Planning, and Policy, 14(2), 25-33.
7. Boots, M.G., Rijkers, F.A.M., and Hoobs, B.F. (2004). Trading in the Downstream European Gas Market a Successive Oligopoly Approach. The Energy Journal, 25 (3), 73-102.
8. BOTAS. (2019). Satış Fiyat Tarifesi. https://www.botas.gov.tr/Sayfa/2021-yili-ocak-ayi-dogal-gaz-toptan-satis-fiyat-tarifesi/522. (Accessed: 21.12.2019).

9. BOTAS. (2020). Lisans Öğrencileri Icin. https://www.botas.gov.tr/Sayfa/lisans-ogrencileri-icin/196. (Accessed: 03.05.2020).
10. Chyong, C., and Hobbs, B. (2014). Strategic Eurasian Natural Gas Market Model for Energy Security and Policy Analysis: Formulation and Application to South Stream. Energy Economics, 44, 198–211.
11. Cohen, G. (2019). Long-Term Gas Contracting: Terms, Definitions, Pricing-Theory and Practice. Institute of Energy for South-East Europe.
12. Dieckhoner, C., Lochner, S., and Lindenberger, D. (2013). European Natural Gas Infrastructure: The Impact of Market Developments on Gas Flows and Physical Market Integration. Applied Energy, 102, 994-1003.
13. Egging, R. G., and Gabriel, S. A. (2006). Examining Market Power in the European Natural Gas Market. Energy Policy, 34(17), 2762-2778.
14. Egging, R., Gabriel, S. A., and Holz, F., and Zhuang, J. (2008). A Complementarity Model for the European Natural Gas Market. Energy Policy, 36(7), 2385-2414.
15. Egging, R., Holz, F., and Gabriel, S. A. (2010). The World Gas Model: A Multi-Period Mixed Complementarity Model for the Global Natural Gas Market. Energy, 35(10), 4016-4029.
16. EMRA. (2020). Doğal Gaz Yıllık Sektör Raporu. https://www.epdk.gov.tr/Detay/Icerik/3-0-94/dogal-gazyillik-sektor-raporu. (Accessed: 03.06.2020).
17. EMRA. (2021). Resmi Istatistikler. https://www.epdk.gov.tr/Detay/Icerik/3-0-166/resmi-istatistikleri. (Accessed: 03.05.2021).
18. Gabriel, S., and Smeers, Y. (2006). Complementarity Problems in Restructured Natural Gas Markets. Recent Advances in Optimization, 343-373.
19. Golombek, R., Gjelsvik, E., and Rosendahl, K. E. (1995). Effects of Liberalizing the Natural Gas Markets in Western Europe, The Energy Journal, 16(1), 85-111.
20. Golombek, R., Gjelsvik, E., and Rosendahl, K. E. (1998). Increased Competition on the Supply Side of the Western European Natural Gas Market, The Energy Journal, 19(3), 1-18.
21. Hasanov, M. (2017). Analyzing the Effects of Import Liberalization in the Turkish Natural Gas Market. Energy Sources, Part B: Economics, Planning, and Policy, 12(3), 237-242.
22. Holz, F., Von Hirschhausen, C., and Kemfert, C. (2008). A Strategic Model of European Gas Supply (GASMOD). Energy Economics, 30(3), 766-788.
23. Holz, F., Richter, P. M., and Egging, R. (2013). The Role of Natural Gas in a Low-Carbon Europe: Infrastructure and Regional Supply Security in the Global Gas Model. The Energy Journal, 37(2016), 33-59.
24. ICE. (2021a). Brent Crude Futures. https://www.theice.com/products/219/Brent-Crude-Futures. (Accessed: 24.06.2021).
25. ICE. (2021b). Dutch TTF Gas Futures. https://www.theice.com/products/27996665/Dutch-TTF-Gas-Futures. (Accessed: 24.06.2021).
26. Icik, Y. E., and Atak, M. (2021). An Evaluation of Turkey's Natural Gas Hub Development Process. International Journal of Economics and Innovation, 7(1), 75-90.
27. Icik, Y. E., and Atak, M. (2022). An Analysis on Turkey’s Natural Gas Hub Development through a Game-Theoretic Model Application. Energy Sources, Part B: Economics, Planning, and Policy, 17(1), 75-90.
28. Kiss, A., Selei, A., and Takacsn e Toth, B. (2016). A Top-Down Approach to Evaluating Crossborder Natural Gas Infrastructure Projects in Europe. Energy Journal, 37, 61-79.
29. Liao R., and Sykes, P. (2019). Going Global: The TTF as an LNG Benchmark. ICIS Insight Paper.
30. Lise, W., Hobbs, B. F., and Van Oostvoorn, F. (2008). Natural Gas Corridors Between the EU and Its Main Suppliers: Simulation Results with the Dynamic GASTALE Model. Energy Policy, 36(6), 1890-1906.
31. Lochner, S., and Bothe, D. (2007). From Russia with Gas: An Analysis of the Nord Stream Pipeline’s Impact on the European Gas Transmission System with the TIGER-Model. EWI Working Paper.
32. Lochner, S. (2011). Identification of Congestion and Valuation of Transport Infrastructures in the European Natural Gas Market. Energy, 36(5), 2483-2492.
33. Mathiesen, L., Roland, K., and Thosnstad, K. (1987). The European Natural Gas Market: Degrees of Market Power on the Selling Side. Golombek, R., Hoel, M., Vislie, J.(Eds.), Natural Gas Markets and Contracts.
34. Murphy, F., Pierru, A., and Smeers, Y. (2016). Tutorial on Building Policy Models as Mixed-Complementarity Problems. Informs Journal on Applied Analytics, 46(6), 465-481.
35. Richter, P., and Holz, F. (2015). All Quiet on the Eastern Front? Disruption Scenarios of Russian Natural Gas Supply to Europe. Energy Policy, 80, 177–189.
36. Reuters. (2022). Turkey's Natural Gas Find in Black Sea Now Comes to 710 bcm -Erdogan. https://www.reuters.com/business/energy/turkeys-natural-gas-found-black-sea-now-comes-710-bcm-erdogan-2022-12-26/. (Accessed: 30.12.2022).
37. Rutherford, T.F., (1995). Extension of GAMS for Complementarity Problems Arising in Applied Economic Analysis. J. Econ. Dyn. Control, 19(8), 1299–1324.
38. Rystad Energy. (2021). There’s a Catch! Turkey’s Hooked Tuna Gas Discovery Could Save it up to $21 Billion in Import Costs. https://www.rystadenergy.com/newsevents/news/press-releases/theres-a-catch-turkeys-hooked-Tuna-gas-discovery-could-save-it-up-to-$21-billion-in-import-costs/. (Accessed: 03.01.2021).
39. Rzayeva, G. (2018). Gas Supply Changes in Turkey. OIES Energy Insight, 24.
40. Steuer, C. (2019). Outlook for Competitive LNG Supply. OIES Paper, NG42.
41. TCMB. (2021). TCMB-Kurlar. https://www.tcmb.gov.tr/kurlar/kurlar_tr.html. (Accessed: 05.01.2021).
42. Toth, T. B., Kotek, P., and Selei, A. (2020). Rerouting Europe’s Gas Transit Landscape – Effects of Russian Natural Gas Infrastructure Strategy on V4. Energy Policy, 146, 1-9.
43. Valle, A., Dueñas, P., Wogrin, S., and Reneses, J. (2017). A Fundamental Analysis on the Implementation and Development of Virtual Natural Gas Hubs. Energy Economics, 67, 520-532.
44. Zwart, G., and Mulder, M. (2006). NATGAS A Model of European Natural Gas Market; CPB Netherlands Bureau for Economic Policy Analysis,144.