Energy Ministry issues regulations for residential, commercial gas network activity

The Minister of Energy approved the regulations for residential and commercial gas network activity, which will come into effect upon its publication on the ministry’s official website.

Under the regulations, gas network activity includes the establishment, development, operation, or maintenance of a dry gas distribution network or an independent gas distribution network. This also includes connecting residential and commercial facilities and supplying consumers with dry gas, liquefied petroleum gas (LPG), or alternative natural gas.

An independent gas distribution network is a standalone network that receives LPG, alternative natural gas, or dry gas from storage tanks and related facilities, delivering it to consumer meters. It includes distribution pipelines, control valves, storage tanks and associated facilities, metering devices, filters, and monitoring and control systems.

Article 2 sets out several obligations for license holders, including the installation of metering devices for consumers, preparation of comprehensive safety, reliability, and maintenance plans, and the submission of a technical management plan.

Article 3 specifies the technical specifications of gases subject to the regulations.

As for the licensing fee, it is SAR 20,000 for a 15-year license to establish a dry gas distribution network, and SAR 5,000 for a five-year license to establish an independent gas distribution network. The fee is payable once prior to license issuance or renewal.

The regulations also require licensees to procure dry gas from the gas supplier affiliated with Saudi Aramco, in accordance with Aramco’s technical standards and approved pricing, and to distribute gas to consumers within the licensed area at the approved tariff.

Additionally, the regulations outline procedures related to billing issuance, accounting separation, and the evaluation of dry gas distribution network activities.