New Petroleum Regulations on the Corporate Integrity Pledge
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The Petroleum General Regulations provide the general rules that licensees should abide by when engaging in petroleum and natural gas midstream and downstream activities in Mainland Tanzania. In this article, we discuss the key provisions of the Regulations and what this means for companies in the energy sector.
The Petroleum (Natural Gas Midstream and Downstream) General Regulations (the Regulations) are made under the Petroleum Act No.21 of 2015 (the Act).[1] The Regulations directly affect a number of Licensees (defined in the Act as a holder of a licence granted by the Energy and Water Utilities Regulatory Authority (EWURA)) including natural gas service workers, transportation and distribution licence holders, persons operating Compressed Natural Gas (CNG) facilities as well as those with a licence to import, transit and export natural gas.
EWURA has also been granted certain additional functions including but not limited to:
It is now a requirement for all gas service workers to have a licence; the Regulations provide the following key points:
According to the Regulations, anyone with a licence to transport gas will among other things be required to enter into an arrangement with any person to ensure:
The Regulations require anyone with a licence to distribute gas to, among others, carry out the following:
Any person who intends to import, transit/export natural gas shall apply to EWURA for a valid licence and the application shall be accompanied by the following information and documents:
*The application shall be accompanied by a non-refundable application fee as prescribed by the Rules made by EWURA and in accordance to section 259 of the Act.
Additionally, any person who has sought approval from EWURA to import, transit/export natural gas shall not later than thirty (30) days make a declaration to EWURA through the National Petroleum and Gas Information System (NPGIS) and shall within seven (7) days be required to verify the details contained in the declaration.
Regulation 23 provides that a person shall only own/operate a CNG facility if he is so licenced by EWURA and in accordance to the Rules made by EWURA.
CNG facility is defined in the Regulations as any activity used for compression, transportation and storage of CNG and it includes CNG cylinders, CNG refuelling stations, receiving stations and meters.
It is important to note that the Tanzania Petroleum Development Corporation (the TPDC) has exclusive rights when it comes to undertaking natural gas midstream and downstream value chain regulated activity that is transportation/distribution of gas, supply of gas to end users, storage, compression of gas, importation and transit operations. However, the TPDC may other than through competitive tendering allow other persons to undertake similar work and any person intending to do so shall apply for consent to the TPDC setting out:
The applicant must also submit a copy of the application to EWURA and shall after having received consent from the TPDC apply for a licence from EWURA. The licence issued by EWURA may include certain terms and conditions, among them requiring the licensee to have a place of business in Mainland Tanzania.
There are a number of acts/omissions which will constitute an offence under the Regulations including, but not limited to, the following:
Offences and penalties |
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Regulation 6 – Licensing of natural gas service worker |
A person who carries out any natural gas service work without a licence will have committed an offence and upon conviction be liable to pay a fine of not less than TZS 20 million/serve a prison term of not less than 5 years/to both. |
Regulation 22 – Construction approval |
It shall be an offence to construct a CNG facility without a construction approval from EWURA. Any person who contravenes this provision shall upon conviction be liable to pay a fine of not less than TZS 20 million/imprisonment for a term of not less than 3 years/to both. |
Regulation 23 – Application for licence |
Any person who owns/operates a CNG facility without a licence from EWURA shall have committed an offence and upon conviction be liable to pay a fine of not less than TZS 20 million/imprisonment for a term of not less 2 years but not more than 5 years/to both. |
Regulation 28 – Requirement for approval |
A licensee who imports, transmits/exports natural gas without first obtaining approval from EWURA shall have committed an offence and upon conviction be liable to pay a fine of not less than TZS 10 million/imprisonment for a term of not less 2 years/to both. |
Regulation 54 – General penalty |
A person who commits an offence for which no specific penalty is provided in the Regulations shall be liable on conviction to a fine of not less than TZS 10 million/imprisonment for a term of not less than 2 years/to both. |
Regulation 55 - Compounding of offences |
A person who admits an offence under the Regulations will where EWURA is satisfied with the admission pay a sum of money not exceeding TZS 100 million. |
[1] The Regulations came into force on 17 April 2020 and are made under the Act and published in Government notice number 270 of 2020.
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