The Oil and Gas Regulatory Authority (OGRA) plays a pivotal role in regulating the Liquefied Petroleum Gas (LPG) sector in Pakistan, under the OGRA Ordinance, 2002, and the LPG (Production & Distribution) Rules, 2001. Since March 15, 2003, OGRA has been issuing licences for the construction and operation of LPG production, storage/filling facilities, air-mix plants, and LPG auto-refueling stations. This article provides a comprehensive guide for clients looking to obtain a licence for Production/Extraction and LPG Air-Mix facilities.
Understanding LPG and its Regulation
Liquefied Petroleum Gas (LPG) is a clean, portable, and economical fuel composed mainly of propane, propylene, butane, and butylenes. The regulation of the LPG sector is crucial to ensure safety, environmental compliance, and market stability. OGRA oversees this regulatory framework, ensuring that all facilities operate within the guidelines set forth in the LPG Rules, 2001.
Categories of Licences
OGRA issues various categories of licences, including:
- Licence for Production/Extraction and LPG Air-Mix facilities
- Licence for LPG Storage and Filling Plants
- Licence for LPG Auto Refueling Stations
- Licence for LNG Terminals
This article focuses specifically on the requirements and processes for obtaining a licence for Production/Extraction and LPG Air-Mix facilities.
Requirements for Production/Extraction and LPG Air-Mix Facilities
The process of obtaining a licence involves several critical steps and the submission of various documents. Here are the detailed requirements:
- Application Form:
- Submit the application in triplicate using the prescribed proforma as set out in Appendix II & III of the LPG Rules, 2001.
- Licence Fee:
- A Pay Order/Bank Draft of Rs. 1,000,000/- in favour of the Oil & Gas Regulatory Authority, payable at Islamabad.
- Company Registration:
- Attested copy of the company’s incorporation certificate.
- Attested copy of the Memorandum and Articles of Association.
- Attested copies of ID cards of all directors/partners.
- Financial Competence:
- Proof of financial competence issued by a bank. The format should certify that the company or its chief executive maintains an account with the bank and has sufficient financial resources equivalent to US $0.5 million for setting up the requisite LPG infrastructure.
- Company Organogram:
- A detailed organogram of the company indicating the management and operational structure.
- Location Details:
- Exact location of the plant site.
- Audited Reports:
- Last three years’ audited financial reports (if applicable).
- Site Verification Fee:
- A Bank Draft/Pay Order of Rs. 25,000/- in favour of the Oil & Gas Regulatory Authority for site verification.
Application and Review Process
- Submission and Initial Review:
- Submit the complete application along with the requisite documents and fees. OGRA will review the application to ensure it meets all regulatory requirements.
- Communication of Shortcomings:
- If there are any deficiencies in the application, OGRA will communicate these to the project proponent for rectification.
- Appointment of Third-Party Inspectors:
- Once the application is complete, OGRA will appoint third-party inspectors to conduct a site inspection. The applicant must offer the site for pre-commissioning inspection within the stipulated timeframe.
- Inspection and NOCs:
- After the third-party inspection, the applicant must provide No Objection Certificates (NOCs) from the District Coordination Officer (DCO), Environmental Protection Agency (EPA), and the Explosives Department.
- Authority’s Decision:
- Upon receipt of the inspection report and NOCs, the complete case is submitted to OGRA for consideration. The Authority will decide on the grant of the licence within ninety days of receiving a complete application.
Issuance of Licence
If the application meets all the requirements and passes the inspections, OGRA will issue a construction licence for a period of one year. During this period, the applicant must complete the construction and request a final inspection for the operational licence.
Conclusion
Navigating the regulatory landscape for obtaining a licence for Production/Extraction and LPG Air-Mix facilities can be complex. However, with meticulous preparation and adherence to OGRA’s guidelines, the process can be smooth and efficient. Josh and Mak International offers expert legal assistance to guide clients through each step, ensuring compliance and successful licensing.
For further information and assistance, please contact Josh and Mak International. Our team of legal experts is dedicated to providing tailored solutions to meet your business needs in the LPG sector.
