Regulation of natural gas production

Ownership and organisation

What is the ownership and organisational structure for production of natural gas (other than LNG)? How does the government derive value from natural gas production?

Not applicable.

Regulatory framework

Describe the statutory and regulatory framework and any relevant authorisations applicable to natural gas exploration and production.

Hydrogen production will be constituted as a liberalised activity.

Unconventional gas production

Are there different rules for, or any restrictions on, unconventional natural gas production (including fracking)?

Regarding the unconventional natural gas sector, which is currently in the preliminary stage of research and data collection, there is no specific legislation regulating the exploration and production of shale gas in Portugal. Therefore, this is subject to the same legal framework that applies to the prospecting and exploration for petroleum (eg, Decree-Law No. 109/94 of 26 April 1994), regulated by the Directorate General for Energy and Geology.

Recently, the Portuguese parliament approved a resolution recommending the government prohibit the exploration and extraction of unconventional gas (Resolution No. 205/2019 of 20 September), but to date there have been no formal instructions in this regard.

Green hydrogen production is now covered by Decree-Law 62/2020. Prior registration will be necessary for the production of gases of renewable origin, and will be granted only to legal persons who can demonstrate adequate technical, financial and managerial capacity, according to Article 69 of the decree-law. More legislation is expected on this topic in the future.

Required security and guarantees

Are participants required to provide security or any guarantees to be issued with a licence to explore for or to store gas?

There is no exploration for natural gas in Portugal. Activities of storage of natural gas and LNG are performed under a public concession contract, under which the grantees are obliged to provide bank guarantees or a cash deposit of €5 million.