Regulation and competition in Turkish natural gas market

This master?s thesis analyses the regulation and competition in the Turkish Natural Gas Market. Natural gas consumption has increased over the globe with the new technologies introduced and the effect of increasing environmental concerns. As a result, the state of natural gas in energy policies of governments gained more importance. Turkey has a strategic location in terms of natural gas resources. Standing between Europe and rich Eastern resources it can be an energy corridor between these regions. In order to be an energy corridor, to provide supply security and to sustain high economic growth, high amount of investment in the natural market is required. For promoting these investments in the market, Turkey, as the other countries, made reforms which are competitive, transparent, increasing efficiency and providing sufficient incentives. However, the aims targeted with Natural Gas Market Law, legislated in 2001, are not reached yet. In this thesis, the reform performed in Turkish Natural Gas Market and the process before the reform are analysed. First the structure of natural gas markets in general is examined; then Turkish natural gas market is investigated. In addition, using the quarterly data set for the period 1989:1-2010:4 and following the approach of Johansen et al. (2000) which allows structural breaks in the series, long run natural gas demand equations is estimated. Key words: Natural gas market, regulation, co-integration, structural breaks