Royal Decree No. M / 36 - Gas supply and pricing system

The law requires that a license be obtained to practice any activity including transportation, treatment, assembling, distribution, sale and disposing of gas.  The President of the Supreme Council must approve the licence while the Ministry of Petroleum and Mineral Resources should review and decide on every application for a permit. The Ministry should consider all relevant issues including: the long-term supply of any given hydrocarbon, the optimal development of the gas industry, and the proximity of the regulated activity to the main gas network.

 

Saudi Aramco (the Saudi Arabian Oil Company) is mandated to collect the relevant hydrocarbons that enter the major gas network. Furthermore, Saudi Aramco or any other company must obtain a license under this system to develop and operate network facilities and pipelines, including transmission and distribution.

 

The law also regulates the right to use the network capacity, such as making use of gas processing plants, retail plants, natural gas networks, liquids transportation, transportation facilities, and local distribution networks.

 

The law establishes license terms and conditions (e.g. local content provisions, safety and health issues, and measures for the protection of the environment from probable negative impacts).  The law requires periodic review and submission of the plans by the licensed companies to the competent ministry.

 

Other provisions relate to: quotas (allocating gas, ethane, and its liquids); standards for technical services; commercial service standards; licensing and insurance fees; transfer of license and asset protection; license amendment; license cancellation; and dispute resolution.

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