Oil and Gas Alert – July 2021

Supreme Decree that amends the Regulation of Commercialization of Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG), adopted by Supreme Decree Nº 057-2008-EM

Supreme Decree Nº 021-2021-EM (“Supreme Decree”), published on July 25, 2021 in the Official Gazette “El Peruano”, amended the Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) Commercialization Regulation, adopted by Supreme Decree Nº 057-2008-EM (“Commercialization Regulation”). This, in order to: (i) encourage the development of the LNG market, (ii) specify, among other aspects, the definitions of LNG Qualified Agent, Cargo, LNG Direct Consumer, LNG Reception Station, LNG Refueling Station, LNG Regasification Station, Refueling Station and LNG-CNG Mobile Unit, and (iii) incorporate the definition and regulate the operation of the LNG Mobile Unit.

The most relevant aspects are detailed below:

• CNG or LNG Qualified Agents (“Qualified Agents”) must suspend the supply to CNG or LNG Direct Consumers (“Direct Consumers”) and CNG or LNG Users (“Users”), in case they detect that the facilities of the latter put at risk the safety of the Qualified Agent and/or the Direct Consumer or User, even when they have the Hydrocarbon Registry in force. Likewise, they shall inform OSINERGMIN about such situation.
• The Qualified Agents may not continue supplying LNG or CNG to Direct Consumers and Users that have not accredited the general review of their internal natural gas facilities, or that have not complied with the qualification process established by OSINERGMIN.
• LNG Refueling Stations may also be implemented within or adjacent to a Liquefaction Station or an LNG Regasification Station, and not just a natural gas Processing Plant as previously foreseen.
• For the design, construction and operation of various CNG and LNG facilities, the OSINERGMIN, exceptionally and at the request of a party, may adopt the application of alternative and/or compensatory measures to those provided for in the Commercialization Regulation.
• OSINERGMIN must publish and update on its institutional portal the Monitoring Guides which include the criteria used to verify compliance with the technical and safety conditions.
• The Qualified Agents and Direct Consumers shall be incorporated to the Order Control System – SCOP; for which OSINERGMIN shall issue the corresponding rules.
• Within 60 calendar days after the publication of the Supreme Decree, the OSINERGMIN shall adapt and/or adopt the supervision procedures or guides that are necessary for the implementation of the provisions introduced by the rule under comment.
• Within 120 working days after the publication of the Supreme Decree, the Qualified Agents and/or Direct Consumers that are operating to date and that need to implement the provisions adopted by the Supreme Decree, shall adapt, and may request an additional term, if necessary.
• Within 30 calendar days after the publication of the Supreme Decree, the Qualified Agents shall report to OSINERGMIN the list of Users and Direct Consumers that have internal natural gas facilities.

Any questions on this matter may be answered by Doctors Jorge Pérez-Taiman (jpereztaiman@estudiorodrigo.com), Carolina Noriega (cnoriega@estudiorodrigo.com), Piero Scarafone (pscarafone@estudiorodrigo.com) and/or Talía Hormaeche (thormaeche@estudiorodrigo.com).