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New Gas Law

Decree regulating the New Gas Law is published by the Government

06/04/2021 | 11h33
Decree regulating the New Gas Law is published by the Government
Petrobras Agency Petrobras Agency

Decree No. 10.712, of June 2, 2021, which regulates Law No. 14.134, known as the New Gas Law, was published in the Official Gazette of the Union this Friday, June 4th. of the legal framework of the natural gas industry, in line with the Novo Mercado de Gas, a program launched in 2019 by the Federal Government aimed at creating an open, dynamic and competitive market.


The decree details some provisions of the New Gas Law in order to clarify issues relevant to industry agents and guide the National Agency for Petroleum, Natural Gas and Biofuels (ANP) and all potential participants in this market.


One of the highlights of the decree is the classification of transport pipelines by technical criteria of diameter, pressure and extension. The decree establishes that the regulation of these criteria by the ANP must observe the promotion of the global efficiency of the networks and that the limits may be different due to the purpose of the gas pipelines.


The decree emphasizes that gas pipelines exclusively of local interest and without potential impact or conflict with planning studies may, exceptionally, not be classified as transport pipelines by the ANP.


"The decree provides the ANP with adequate means for classifying gas pipelines, in order to distinguish gas pipelines from those whose sole purpose is to provide local piped gas service. It also allows investments in infrastructure to be made in order to expand the networks of pipelines, bringing natural gas to more Brazilians", emphasizes the secretary of Oil, Natural Gas and Biofuels at the MME, José Mauro Coelho.


It is also important to highlight that the text clarifies that the direct connection of natural gas end users to the transport network will only be possible when permitted by state regulation, which eliminates a significant point of concern for the states. In addition, it preserves the classification of gas pipelines that are under implementation or in operation before the publication of the new law.


The unbundling of competitive and distribution activities was also the object of regulation, bringing greater clarity as to the objectives and guidelines to be observed by the ANP. The decree makes clear the possibility of a corporate relationship between companies that carry out competitive activities and piped gas distributors. However, it imposes some conditions and restrictions for agents who carry out competitive activities authorized in the sphere of competence of the Union, in order to ensure equal conditions for participation in the market, in favor of the national consumer.


In addition, the decree addresses other issues relevant to the industry, such as the equivalence of biomethane to natural gas, an important biofuel with great potential for expansion in the country, and the interconnection between the transport system and compressed natural gas (CNG) facilities , which allows the competitive expansion of this energy source to new regions.


Aiming at the formation of a more competitive gas market, the decree established guidelines for the implementation of the natural gas sales program, with simultaneous transfer of transport capacity related to the volume of released gas. "The application of mechanisms to reduce the concentration in the supply of natural gas is essential to create opportunities for the entry of new agents in the market", says the secretary of the MME.


Guidelines were also established for: non-discriminatory and negotiated third-party access to essential infrastructure; the organization of the wholesale natural gas market, with a view to ensuring its proper functioning and transparency in pricing; and the exercise of underground storage of natural gas.


Another highlight are the instruments for articulating the Ministry of Mines and Energy (MME) and the ANP with the states and the Federal District for the harmonization and improvement of industry standards, provided for in art. 45 of Law No. 14.134, of 2021.


The Federal Constitution divides competences related to gas pipeline networks, establishing the Union's monopoly over the transport activity and attributing to the states the exploration of local piped gas services. In this sense, the decree makes it clear that state competences in relation to local piped gas services are preserved.


"As a network industry, it is essential that the regulation and operation of the system occur in harmony, under the two spheres of competence. It is the transport and distribution networks that, together, allow the connection between supply sources and end users ", completes the secretary.


One of these instruments for the Union's articulation with federated entities is the formation of "Knowledge Networks", with the objective of generating, sharing and disseminating knowledge and experiences, as well as formulating proposals for policy standards, guides and manuals.


The norm also creates the "National Pact for the Development of the Natural Gas Market", which represents a voluntary commitment at the national and state levels to implement the necessary measures for the harmonization of regulations and the development of the natural gas industry. These articulation instruments will be better discussed and deepened by the Federal Government in collaboration with the States and the Federal District.


The New Gas Market is already being implemented, however, so that all necessary actions can take place in a timely and appropriate manner, the Decree also dealt with guidelines for the transition of the natural gas industry in the country, seeking to promote speed in the adoption of measures.


Finally, the provisions contained in Decree 10.712/2021 represent another important step for the consolidation of the new legal and regulatory framework, in particular in relation to promoting competition and attracting investments, fundamental elements for the natural gas industry to be able to boost the country's economic growth.



Font: T&B Petroleum/Press Office
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