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Tuesday, 8 August 2017

The Natural Gas Act is now law of the land

Even if there’s pullback on electricity, the state took a clear step forward yesterday to deregulate the natural gas industry. President Abdel Fattah El Sisi signed into law the long-awaited Natural Gas Act, the drafting of which wrapped back in October 2015. The Act, published in Monday’s issue of the Official Gazette, will see the state become the primary regulator of the industry, but allow the private sector to directly trade gas using the pipeline and network infrastructure. The law will establish a state regulator that would have a say in pricing gas, set up the rules of the system, encourage investment in the sector, and ensure equal access by private sector players to the national gas infrastructure. The regulator will also be tasked with drawing up the timeline for privatization. Five primary industry roles are now open to the private sector: Pipeline operator, distributor, storage provider, gas shipper, and importer. Pipeline operators and distributors can set their own pipeline utilization fees. You can tap here for a refresher on other key points of the legislation, including definitions of the various roles open to private-sector players.

We await the executive regulations of the act, which Oil Minister Tarek El Molla said would be coming in September.

The move would open the door for EGAS to issue private licenses to import gas, having given three companies preliminary approval to do so. Five companies had bid to import natural gas privately, including Alaa Arafa’s Dolphinus Holdings — rumored to have been in talks to import gas from Israel’s Tamar gas field — and Qalaa Holdings’ TAQA Arabia.

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