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Tuesday, 31 March 2020

Natgas regulator lowers fees for commercial licenses

Natgas regulator lowers fees for commercial licenses: The Natural Gas Regulatory Authority will charge companies lower fees this year for commercial gas transmission, shipping, distribution, and supply licenses, Al Mal reports, citing an unnamed top government official. The new rates, which are between 22-30% lower, are as follows:

  • USD 0.044/mmBtu for transmission licenses, down from USD 0.057 last year;
  • USD 0.024/mmBtu for shipping licenses, down from USD 0.031 last year;
  • USD 0.016/mmBtu for distribution licenses, down from USD 0.023 last year; and
  • USD 0.006/mmBtu for supply licenses, down from USD 0.008 last year.

Fee for national grid use brought back up to 2018 levels: The regulator’s board approved bringing back the fee companies pay to use the state’s national grid to transport gas to USD 0.38 / mmBtu. The fee was set at this rate back in 2018, at which time the authority was just starting to begin issuing and revoking licenses for private sector industry players. It was then slashed to USD 0.29/mmBtu in 2019.

Background: Egypt has moved in recent years to deregulate the natural gas grid, opening it to use by the private sector. The authority which was made responsible for licensing in 2017 has, however, postponed an early issuance originally due in September 2018, saying at the time the private sector was “unprepared.” A year later, we picked up reports that 18 natural gas import and distribution licenses were issued, but import licenses were given exclusively to state-affiliated companies. Private sector companies, on the other hand, were given distribution licenses, which allow them to expand and build up the natural gas distribution grid.

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