Executive Decree regulates new Gas Act

New aspects reinforces the regulatory structure for operating in the gas market

Published on June 4, 2021, Executive Decree No. 10.712 regulates the new Gas Act, sanctioned in April. The provisions deal with important topics and reinforce the regulatory structure for operating in this market.

The text sets rules on the classification of transport gas pipelines, on the definition of criteria for transport capacity release and definition of conditions for corporate relationship between companies in the sector.

Take a look at some important aspects of the new executive act related to natural gas transportation, storage and distribution:

Transportation

• The authorization process for constructing transport gas pipelines will be followed by a dispute period, in which other carriers may express interest in implementing the pipeline for the same purposes.
• The definition of diameter, pressure and extension limits for gas pipelines shall consider the promotion of overall efficiency of networks.
• Gas pipelines intended for connection of CNG and LNG facilities to other natural gas transportation pipeline will be considered transport gas pipelines.
• The National Petroleum, Natural Gas and Bio-fuel Agency (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis - ANP) may exceptionally choose not to classify a particular gas pipeline as a transport gas pipeline, when pipelines are exclusively of local interest and do not present any potential impact or conflict with planning studies.
• Direct connection between transportation facilities and natural gas end users may be made when allowed by state rules.

Underground storage of natural gas, production discharge pipelines and natural gas processing, treatment, liquefaction and regasification facilities

• ANP will regulate third party access to underground natural gas storage facilities.
• The residual extraction of liquid hydrocarbons during natural gas underground storing will be carried out under a simplified regime, according to ANP rules, with exemption from bidding process.

Natural gas commercialization and distribution

• The corporate relationship between competing companies and gas distributors is allowed, provided the article 30 of Act No. 14.134/2021 is observed.
• To avoid anticompetitive practices in the natural gas market, ANP will establish conditions for obtaining and maintaining permits to operate.
• ANP will be responsible for monitoring and regulating the natural gas market.

At the end of the text, it is also stated that state jurisdiction over local gas services is preserved.

The decree also establishes the creation of knowledge networks under coordination of the Ministry of Mines and Energy and the voluntary participation of the states and Federal District, aiming to produce and share knowledge and develop proposals of policies, standards, guides and manuals.

See also: New Gas Act: opportunities and challenges for business

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