Following a long consultation process, on January 14 2016 the Energy Regulatory Commission (CRE) published general administrative provisions which establish new open access rules for natural gas pipeline transportation and storage services.
The new provisions apply to natural gas transportation by pipeline and storage activities, and set out:
- the open access obligations to which permit holders undertaking these activities will be subject;
- the service modalities applicable to these activities; and
- the conditions under which midstream facilities can be considered 'self-use' facilities and thus not fall subject to the open access rules.
Some of the most relevant aspects of the open access rules are as follows:
- Two services modalities are established – Firm Service, which entails the execution of capacity reservation contracts where services are not subject to interruptions, reductions or suspensions (except under extraordinary circumstances), and Interruptible Service, which does not entail the reservation of capacity in a pipeline or storage facility.
- Transportation and storage services companies shall provide open access to their services, subject to the existence of available capacity and the technical and economic feasibility of the requested service.
- Transportation and storage services companies shall carry out open seasons to allocate available capacity (which also applies to new infrastructure).
- The open access rules regulate the allocation and assignment of reserved capacity in the secondary market.
- The CRE may allow a percentage of a pipeline's or storage system's capacity to be used for transporting or storing natural gas owned by the permit holder, for self-consumption purposes.
- The CRE will approve service rates based on the Hydrocarbons Law, the Regulations to the Activities Referred in Title Three of the Hydrocarbons Law and further regulations to be issued by the CRE.
- The open access rules establish the general aspects that will be covered by the General Conditions for the Provision of Services to be approved by the CRE for each pipeline and storage facility.
Aside from the specific provisions established by the open access rules on matters relating to capacity marketing limitations and the percentages that a permit holder may reserve in a system for its own products, matters relating to vertical integration restrictions, cross-participation and related authorisations will be governed by a separate set of regulations.
For further information on this topic please contact Rogelio López-Velarde, Amanda Valdez, Daniela Monroy or Diego Campa at López Velarde, Heftye y Soria by telephone (+52 55 3685 3334) or email (email@example.com, firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The López Velarde, Heftye y Soria website can be accessed at www.lvhs.com.mx.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.