The Oil and Gas Regulatory Authority (OGRA) Licensing Rules, 2002, established a comprehensive framework for the regulation of the natural gas sector in Pakistan. These rules were formulated under the Natural Gas Regulatory Authority Ordinance, 2000, to ensure orderly development and management of natural gas transmission, distribution, and sale. This article provides a detailed overview of these rules, their application process, criteria for granting licenses, and the responsibilities of licensees.
Overview of OGRA Licensing Rules, 2002
The OGRA Licensing Rules, 2002, came into force on February 26, 2002, and have been amended periodically to address evolving industry needs. The rules are divided into several parts, each covering specific aspects of licensing and regulation.
Definitions and Preliminary Provisions
The rules define key terms such as “annual turnover,” “common carriage,” “correct meter,” “main,” “meter,” and “pipeline,” among others, to provide clarity and precision in regulatory operations. The definitions section is critical for understanding the scope and application of the rules.
Licensing of Regulated Activities
The core of the OGRA Licensing Rules, 2002, lies in the licensing of regulated activities, including:
- Transmission of natural gas
- Distribution of natural gas
- Sale of natural gas
Criteria for Licensing
OGRA evaluates applications based on the following criteria:
- Technical, administrative, and financial capabilities of the applicant.
- Viability of the sources of natural gas supply.
- Impact of the proposed project on existing infrastructure.
- Compliance with safety and service obligations.
Application Process
To obtain a license, applicants must submit an application in the prescribed format, along with requisite fees and supporting documents. The application must include details such as the company’s memorandum and articles of association, financial statements, technical specifications of facilities, and a detailed project description if applicable.
Admission and Evaluation of Applications
Upon submission, the Registrar examines the application for conformity with the rules. The Authority may request additional information or documentation to facilitate the evaluation process. If the application meets all requirements, it is placed before the Authority for a decision.
Public Participation and Hearings
OGRA ensures transparency by allowing interested parties to intervene or submit comments during the application process. Public hearings may be conducted to gather inputs and address concerns from various stakeholders.
Obligations of Licensees
Licensees must adhere to several obligations to maintain their licenses:
- Compliance with all relevant laws, rules, and regulations.
- Non-discriminatory service provision.
- Regular maintenance and safety checks of their facilities.
- Provision of accurate and timely information to OGRA.
- Seeking prior approval for major contractual agreements and amendments.
Tariff Regulation
Licensees cannot charge tariffs exceeding those approved by OGRA. The Authority considers factors such as consumer protection, cost-efficiency, and reasonable returns to the licensee when approving tariffs.
Safety and Environmental Compliance
Licensees must comply with safety standards and environmental regulations, including the Pakistan Environmental Protection Act, 1997. They are required to submit and adhere to a consumer service manual detailing their rights and obligations.
Insurance and Liability
Licensees must obtain adequate insurance to cover liabilities arising from their operations. They are also responsible for publishing information on available capacity and ensuring non-discriminatory access to their facilities.
Modification and Revocation of Licenses
License Modification
Licensees may apply for modifications to their licenses if required. OGRA also reserves the right to initiate modifications if deemed in the public interest. Such modifications are subject to a thorough evaluation process and public hearings.
License Revocation
OGRA can revoke a license if the licensee fails to comply with regulatory requirements, is unable to discharge its obligations, or if the service is interrupted without reasonable cause. Revocation proceedings include an opportunity for the licensee to be heard.
Transitional Provisions
Existing companies engaged in regulated activities before the enactment of these rules were required to apply for licenses under the new framework. These companies are deemed to be licensed under the Ordinance and the rules until OGRA makes its final determination on their applications.
Conclusion
The OGRA Licensing Rules, 2002, provide a robust regulatory framework for the natural gas sector in Pakistan. These rules ensure that natural gas transmission, distribution, and sale are conducted in an orderly, efficient, and safe manner, protecting the interests of consumers, licensees, and the nation as a whole. Compliance with these rules is essential for maintaining the integrity and reliability of Pakistan’s natural gas infrastructure.
For further information or assistance with OGRA licensing matters, please contact Josh and Mak International. Our legal experts are well-versed in the intricacies of natural gas regulation and can provide comprehensive support and guidance.