Effective March 31, 2023, prospective players in the midstream and downstream sectors of the country’s oil and gas industries would henceforth be expected to get their operational permits through through a special online registration platform on the Nigerian Midstream and Downstream Petroleum Authority (NMDPRA) website.
The midstream/downstream regulator said no company or person shall be engaged by any licensee or operator in the industry without a valid permit issued by the NMDPRA through the portal, in line with the provisions of the Petroleum Industry Act (PIA).
The mandatory registration for issuance of operational permits to render various services in the oil and gas industry, the Authority said, would cover three categories of services, namely general permit for artisans as well as major and specialized, for companies interested in rendering specialized services in the industry.
While the general permit would take about three days to issue, the major and specialized permits would take a longer period, as they would require the verification of the background, skills, capacities, experience and competence of the prospective applicant.
The announcement on the unveiling of the new registration platform was made in Abuja on Wednesday just as the Authority launched six gazetted regulations for the midstream and downstream sectors of the petroleum industry.
The new regulations included those for Midstream and Downstream Petroleum Operations; Petroleum Measurement; Assignment or Transfer of License and Permits; Natural Gas Pipeline Tariffs; Gas Pricing, Domestic Demand and Delivery, and Petroleum (Transportation and Shipment).
Speaking at the launching, the Authority Chief Executive, Farouk Ahmed, described the regulations as priority legislative instruments under the PIA governing the business and setting the rules for all petroleum operations and activities in the country
He said the PIA has put in place a framework for the development of the relevant regulations to support sustainable growth and investment across the oil and gas value chain in the country.
The regulations are among 20 to be developed by the NMDPRA in consultation with relevant stakeholders, to enable businesses through regulatory clarity, certainty, fairness, transparency, and best Industry standards.
The Authority’s Legal department explained that Midstream and Downstream Petroleum Operations regulations would regulate the operations of the companies in the sector; provide procedures for the grant of licenses, permits, authorizations and payment of fees, and specify sanctions and penalties for non-compliance.
The regulation applies to licenses and permits for gas and petroleum liquid operations; oil and gas service permits; duties and obligations of licensee and permit holders; importation, exportation, shipping, unshipping, and landing of petroleum, petroleum liquids, and products, conformity assessment, technology adaptation and general offences.
Also, the Assignment or Transfer of License and Permit Regulations, the department said, would establish procedure and prescribe fees for assignment or transfer of license or permit by licensees or permit holders; provide sanctions or administrative penalties for failure to comply with these regulations.
These regulations shall be applicable to midstream processing facilities, installations, terminals, and pipelines, blending facilities and petroleum products facilities, oil and gas retail outlets, assignment or transfer of license and change of name by licensee or permit holders.
The Petroleum Measurement Regulations the department said, would regulate and ensure accurate measurement and allocation of gas or its derivatives, crude oil or its derivatives, determine the basis for calculating revenue accruing to government, licensees, contractors, and other parties as well as provide sanctions or administrative penalties for failure to comply with the regulations.
The law would apply to duties of licensees and permit holders, to ensure that measurement systems were installed at appropriate measurement points in the sector operations, in terms of Static and Dynamic measurement methods for natural gas or its derivatives, crude oil or its derivatives; petroleum products; condensate or any other form of petroleum liquids.
For the Gas Pricing and Domestic Demand Regulations would help to regulate the prices of marketable natural gas of the strategic sectors under the PIA; identify the unregulated markets and make provisions for such markets.
The law would be for regulated and unregulated gas prices of the strategic sectors; quality specification of marketable natural gas; determination of the strategic sector; domestic gas demand requirement; gas pricing classification; domestic base price; average international gas price; feed gas prices; domestic gas aggregation; aggregate gas price and gas pricing for retail gas customers.
Petroleum (Transportation & Shipment) Regulations would regulate activities relating to transportation, loading, lifting, shipment, and export of natural gas or its derivatives, crude oil or its derivatives, condensates, petroleum liquids etc. in the country.
Other objectives of the law include to prohibit illegal and unauthorized activities connected with natural gas or its derivatives, crude oil or its derivatives, condensate, petroleum liquids, petroleum product or any other form of petroleum liquids in the petroleum industry and provide sanctions or administrative fines for failure to comply with the regulations.
The law would be applicable to the submission of advance lifting schedule for shipment, or export of natural gas or its derivatives, crude oil or its derivatives, condensate, petroleum liquids, petroleum products, or any other form of petroleum liquids; lifting identification number issued by the Authority; verification and certification of declaration relating to the ship, tanker, or vehicle loading natural gas, crude oil, condensate, etc., restriction on tanker or ship not to depart without full documentation, prohibition of topping, loading, offloading, importation, or trans-shipment in an unauthorized location and loading petroleum into ballast tank.
The objective of the Natural Gas Pipeline Tariff Regulations would be to provide a regulatory framework to determine a suitable gas transportation pipeline tariff regime; establish a tariff methodology for the transportation and transmission of natural gas through gas transportation pipelines and gas transportation networks.
The application of the law would be on tariff structure and capacity and, commodity charges; tariff methodology published by the Authority; tariffs calculation on commodity charge and capacity charge by operator.
These agency said these regulations would aid the control processes, setting standards, and monitoring operations in the technical and commercial aspects of the midstream and downstream petroleum sectors and provide internally generated revenue for the Authority.