By: Andreas Rae Johanes

 

Minister of Energy and Mineral Resources enacted the Minister of Energy and Mineral Resources Regulation No. 4 of 2018 concerning The Trade of Oil and Natural Gas Utilization in Downstream Sector (“MR 4/2018”).  The said regulation is made to encourage the development of natural gas infrastructure through pipelines, increase the utilization for domestic needs and accommodate the distribution of natural gas besides the trade of pipes on natural gas.  Since MR 4/2018 enacted dated 25 January 2018, the previous regulation Minister of Energy and Mineral Resources Regulation No. 19 of 2009 concerning The Trade of Natural Gas Through Pipelines (“MR 19/2009”) revoked and shall be declared no longer valid.

MR 4/2018 distinguish natural gas trade through pipeline that is on the transmission segment and on area distribution network and certain commercial area, so that each business entity besides hold oil and natural gas transportation business license they shall have special rights on transmission segment and special rights on area distribution network.  Different from previous regulation on the MR 19/2009 where it regulates the trade of natural gas commerce through pipelines and the trade of natural gas transportation through pipelines but does not distinguish the special rights on transmission segment and special rights on distribution network area.

Article 1(8) of MR 4/2018 determines that transmission segment is certain segment of natural gas transmission network which is part of national master plan of natural gas transmission and distribution network to implement the natural gas transportation through transmission pipelines. Pursuant to Article 10(1) of MR 4/2018, transportation of natural gas trade through pipelines on transmission segment implemented by business entity which hold oil and natural gas transportation business license and special rights on transmission segment also have the transmission pipe and its supporting facilities on transmission segment (Article 10(2) MR 4/2018).  The term “Open Access” on previous regulation where business entities shall use transmission pipe and/or distribution pipe which available to be used together is no longer contained on MR 4/2018.  It means business entities shall have its own ransmission pipe and supporting facilities because there is no transmission pipe and/or distribution pipe which available to be used together anymore.

Article 1(9) of MR 4/2018 determines that area distribution network is a certain area of natural gas distribution network which is part of national master plan of natural gas transmission and distribution network to implement the natural gas transportation through distribution pipelines.  Certain commercial area is certain area to implement natural gas commercial trade (Article 1(10) of MR 4/2018).  Pursuant to Article 14 of MR 4/2018, trade on area distribution network and certain commercial area implemented by business entity which hold oil and natural gas transportation business license, special rights on regional distribution network, and oil and natural gas business license.  Article 15(1) of MR 4/2018 determines that business entity which mentioned on Article 14(1) of MR 4/2018 can have both oil and natural gas transportation business license and oil and natural gas business license for more than one area distribution network and certain commercial area.  It means business entities are able to conduct business activity in several areas of distribution network and also certain commercial areas.

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