FREQUENTLY ASKED QUESTIONS (FAQ) REGULATION OF LIQUEFIED PETROLEUM GAS (LPG) BY NERSA

Transcription

1 FREQUENTLY ASKED QUESTIONS (FAQ) REGULATION OF LIQUEFIED PETROLEUM GAS (LPG) BY NERSA

2 Glossary of Terms LPG Liquefied Petroleum Gas The Gas Act The Gas Act, 2001 (Act No. 48 of 2001) The NERSA Act The National Energy Regulator Act, 2004 ( Act No. 40 of 2004) The Petroleum Pipelines Act The Petroleum Pipelines Act, 2003 (Act No. 60 of 2003) The Petroleum Products Act The Petroleum Products Act, 1977 (Act No. 120 of 1977) Page 2 of 8

3 Regulation of LPG by NERSA Question 1 What are NERSA s roles and responsibilities? NERSA was established in terms of section 3 of the NERSA Act to regulate the electricity, piped gas and petroleum pipelines industries. Question 2 In terms of which Act is LPG regulated by NERSA? Different parts of the LPG value chain are regulated by NERSA in terms of the Gas Act or the Petroleum Pipelines Act. NERSA does not regulate the manufacturing, wholesaling or retailing (in cylinders) of LPG. This is done by the Department of Energy (DoE) in terms of the Petroleum Products Act. The DoE also prescribes the maximum retail prices for LPG supplied to residential customers. For more information, visit DoE s website at Question 3 What if my LPG facility falls under both the Gas Act and the Petroleum Pipelines Act? Before submitting any application for a licence, it is advisable to contact NERSA for advice regarding which of the two Acts is more appropriate for your LPG facility. Page 3 of 8

4 SECTION 1 REGULATION OF LPG - THE GAS ACT Question 4 How is LPG regulated in terms of the Gas Act? Gas is defined in the Gas Act as hydrocarbon gasses transported by pipeline. LPG is one of the types of gas specifically listed in the definition. Therefore, any LPG that is transported by pipeline falls under the Gas Act. See below for exemptions. NERSA issues licences for the construction and operation of, as well as conversion of infrastructure into: gas transmission facilities; gas storage facilities, gas distribution facilities; gas liquefaction facilities; and gas re-gasification facilities. NERSA also issues licences for trading in gas and may approve maximum prices for distributors, reticulators and all classes of consumers of piped gas. Certain gas activities or facilities do not require licensing but must be registered with NERSA in terms of section 28 of the Gas Act. These are: the production and importation of gas; the transmission of LPG for personal use, must be registered with NERSA; and Small biogas project in rural communities and not connected to the national gas pipeline grid. Page 4 of 8

5 Question 5 Which LPG activities/ facilities are exempt in terms of the Gas Act? LPG reticulation by pipeline and any related trading; LPG supplied from a bulk storage tank or cylinder, piped at less than 2 bar gauge and crossing no more than four erf lines between separate property boundaries. Page 5 of 8

6 SECTION 2 REGULATION OF LPG - PETROLEUM PIPELINES ACT Question 6 How is LPG regulated in terms of the Petroleum Pipelines Act? Petroleum product is defined in the Petroleum Pipelines Act as any liquid petroleum fuel or any substance that can be used for a purpose that liquefied petroleum fuel can be used. By its nature LPG is a liquid petroleum fuel and is used for purposes for which other types of liquid petroleum fuels are used. Unlike in the Gas Act, LPG need not be transported by pipeline in order to fall under the Petroleum Pipelines Act. NERSA issues licences for the construction, operation and conversion of, Petroleum pipelines; Petroleum loading facilities; and Petroleum storage facilities Question 7 Which LPG facilities do not fall under the Petroleum Pipelines Act? LPG bunkering facilities Pipelines: o on the premises where LPG is manufactured; o on the premises of an LPG storage facility (these are licensed as part of the storage facility); o on the premises of an LPG retailer; and o on the premises of an agricultural cooperative. Storage facilities: o used as an integral part of the manufacturing of LPG and that are located on the premises where the LPG is manufactured; o used to store LPG for own use; o used for the retailing of LPG to the public; o used by an agricultural cooperative exclusively for its members; and o used to transport petroleum by road, rail sea and air. Page 6 of 8

7 Question 8 What is a bulk storage facility? Bulk is not defined in the Petroleum Pipelines Act. Any storage of LPG for commercial purposes is subject to licensing by NERSA. Question 9 What can I do if I believe that my LPG storage facility should not be classified as a bulk storage facility and therefore should not be regulated in terms of the Petroleum Pipelines Act? Only NERSA has the authority to determine if an activity requires licensing or not. In order to avoid contravening the Petroleum Pipelines Act, owners of LPG facilities must contact NERSA to find out if their facilities should be licensed by NERSA. Question 10 How do I apply for a licence? Before submitting an application for a licence to NERSA, it is advisable to first contact NERSA for a pre-licence application meeting. During this meeting you will be provided with all the necessary documents and the licence application processing steps will be fully explained to you. For more information on how to apply for a licence, please download a document called Frequently asked questions (FAQ) on how to comply with the Petroleum Pipelines Act (Act No. 60 of 2003) from the NERSA website or contact NERSA. Page 7 of 8

8 CONTACT DETAILS Gas Regulation Attention: Head of Department Gas Licensing, Compliance and Dispute Resolution Department Tel: Petroleum Pipelines Regulation Attention: Head of Department Petroleum Licensing, Compliance and Dispute Resolution Department Tel: Page 8 of 8