As part of its expansion of operational safety and environmental protection guidelines and administrative provisions, the National Agency for Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector (ASEA) recently turned its attention to oil, gas and petrochemical pipeline transportation activities. This resulted in the issuance of the General Administrative Provisions that Establish the Guidelines on Industrial Safety, Operational Safety and Environmental Protection for Ground Transportation via Pipelines of Oil, its Derivatives and Petrochemicals, which were published in the Federal Official Gazette on March 31 2017 and took effect on April 1 2017.
The guidelines introduced stricter requirements regarding the technical, documentary, operational and cautionary aspects of ground transportation projects in the hydrocarbons sector.
Before the issuance of the guidelines, pipeline development projects were subject only to standard environmental regulatory requirements – namely:
- an environmental impact assessment, which includes the specific repercussions of the project for ecosystems, soil, flora and fauna and air and water quality, along with the proposed measures to mitigate such effects; and
- an environmental risk study, which describes any possible contingency scenarios and the proposed responses.
While the abovementioned requirements ensured that projects with associated environmental impacts or operational risks which outweighed the project's economic and social benefits did not proceed, they lacked a technical perspective and maintenance, safety and environmental protection obligations for ground transportation projects – something which would have ensured that the projects did not pose a threat to the environment.
The new guidelines complement the environmental legal framework so that both environmental and personal safety are guaranteed during the complete lifetime of a pipeline project, including during the design, operation and dismantling stages. The guidelines are now mandatory for companies constructing, operating and maintaining any of the following projects:
- land transportation systems which transport liquid oil, oil derivatives and petrochemicals via pipelines linked to a natural gas processing station or an oil refinery within Mexico, including any initial or intermediate pumping stations;
- pipeline segments of a transportation system between pumping stations (from the first flange of the sectioning valve in the pig-launching trap to the last flange of the sectioning valve in the pig-receiver trap);
- pipelines transporting oil, oil derivatives and petrochemicals – as well as any related facility – which are limited by pig traps. However, when no pig traps are installed, the limit is set by the first battery limit sectioning valve on a storage facility or pumping station, among other facilities;
- pipelines, equipment and facilities relating to ground transportation systems of liquid oil, oil derivatives and petrochemicals coming from a natural gas processing station or an oil refinery;
- instrumentation pipes and other auxiliary infrastructure connected to the pipeline; and
- any modification or technology switch, trace change, repairs, recovery or alterations to the normal operating conditions of a pipeline transportation system.
Further, the guidelines introduce a number of obligations applicable to each of the abovementioned projects, such as the creation of several technical documents during each phase of a specific pipeline or transportation project, which must be prepared by an ASEA-authorised third party (or, if no third party exists, by the ASEA itself). These documents include technical opinions regarding pre-operation, reactivation and dismantling programmes, as well as a closing technical assessment, as applicable.
Companies that had commenced such projects when the guidelines came into force have 180 calendar days to comply with the new requirements, with the exception of companies undertaking design and construction operations, as these must comply with the standards that were valid when the construction or design began.
Other than the technical opinions and assessments, regulated entities involved in any activity covered by the guidelines must file different notices and reports with the ASEA, including:
- an operations start notice no later than 10 business days from the start of operations;
- a dismantling or closing initiation notice at least 15 business days before initiating any dismantling or closing activities; and
- a dismantling or closing finishing notice no later than 15 business days from the finalisation of the dismantling or closing activities.
Environmental and operational safety-related matters for specific projects in the hydrocarbons sector are becoming progressively more sophisticated in Mexico and pipeline transportation systems are no exception. The ASEA is a game changer in this industry, as it has created specific environmental and operational safety requirements that provide certainty to regulated parties where the more basic environmental instruments do not. With the new guidelines, the ASEA has imposed rules on oil and gas transportation system operators, which will ensure that the anticipated increase in the development of these types of project will not result in unexpected or unchecked adverse effects for the environment, natural resources, persons and facilities.
For further information on this topic please contact Brenda Rogel Salgado, Jeanett Trad Nacif, Juan Francisco Torres Landa or Mario Jorge Yanez at Hogan Lovells BSTL, SC by telephone (+52 55 5091 0000) or email ([email protected], [email protected], [email protected] or [email protected]). The Hogan Lovells BSTL, SC website can be accessed at www.hoganlovells.com.