Published
October 28, 2017, 10:01 PM By
Myrna M. Velasco
Concentration of power
is being vested upon the Department of Energy (DOE) and the Office of the
Secretary on the propounded next phases of investments in the country’s gas
sector.
In the draft Circular
on Rules and Regulations for the Philippine Natural Gas Industry, the energy
chief’s authority shall cover those on permitting and licensing to issuance of
notice-to-proceed (NTP) on construction of gas projects up to the posting of
performance bond relating to operation and maintenance of gas infrastructure
facilities.
Outside of the
investments being cast by state-run Philippine National Oil Company (PNOC), the
proposed rules once enforced, may be treated as either vote of confidence or
semblance of rejection on the vast powers that the DOE has been trying to
assume in the gas sector’s investment reset phase.
In the proposed rules, it
was stipulated that “after compliance with the permitting and financial
closing, the DOE Secretary shall issue the PCERM (permit to construct, expand,
rehabilitate and modify) as an authority by the operator to proceed with the
construction, including the expansion and modification, whenever applicable of
the natural gas facilities.”
The scope of such
permitting process is not totally demarcated, if such will just be imposed on
pipelines, spur lines and distribution networks or if other facilities shall also
be covered.
The DOE held its second
round of public consultation on the gas regulatory framework on October 27
(Friday), with the activity still anchored on securing inputs from stakeholders
and interested investors.
Distribution system, as
defined in the regulation framework, would refer to “the pipeline and related
facilities used to transport natural gas extending between the last delivery
point of the transmission system to the last connection point to the customer.”
Less clear in this mandate would be the exact stretch that such policies are
prescribed to, since ‘customer’ could refer up to the end-user that shall be
directly using the gas as a commodity, whether in power or non-power
applications.
The draft circular,
nevertheless, indicated that for facilities that shall be for an entity’s
own-use, these might be excluded from the permitting requirements that shall be
secured from the energy department.
For pipelines, the DOE
set out the need for operators to secure a Congressional franchise, but the
10-year duration of operation is being set unilaterally by the DOE, with an
option for renewal of 10 years.
On the requisite
approvals on gas projects, it was specified that “the applicant shall be given
a period of three (3) months from date of issuance of NTP (notice-to-proceed)
to secure permits or clearances from other government agencies and submit
financial closing.”
It has also been
specified that “the completion of construction shall be within the approved
construction timeline,” that shall also be prescribed in the DOE’s permitting
process.
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