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Natural Gas Transits and Market Power - The Case of Turkey

Simon Schulte () and Florian Weiser
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Simon Schulte: Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)
Florian Weiser: Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)

No 2017-6, EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)

Abstract: Turkey is a key country in order to realize the Southern Gas Corridor (SGC) due to its geographical location. However, as the main transit country within the SGC, Turkey could potentially exert market power with gas transits. Whether Turkey exerts market power or not, is crucial for an economic assessment of the SGC. Hence, the article investigates this issue quantitatively using a global partial equilibrium gas market model. An oligopolistic and a competitive supply structure in Europe in 2030 are considered in the model. If the European gas market in 2030 is characterized by an oligopolistic supply, Turkey is able to exert market power resulting in higher prices compared to competitive transits, in particular in South Eastern Europe. In a competitive market structure, however, the importance of the SGC and thus the potential of Turkish transit market power is limited.

Keywords: Natural Gas; Southern Gas Corridor; Transit Market Power; Mixed Complementarity Problem (search for similar items in EconPapers)
JEL-codes: L13 L95 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-ene
Date: 2017-07-11, Revised 2017-08-15
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ewikln:2017_006

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