1
Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Representative Rudys Caesar G. Fariñas I 
EXPLANATORY NOTE 
There is a need for a statute that will cover all aspects of the midstream natural 
gas industry, which includes transportation, transmission, storage, and 
marketing of natural gas, in its original or liquefied form.  Because of this, and 
owing to the intricacy of the midstream natural gas industry, comprehensive 
legislation is needed to fill in the gaps and strengthen existing bridge policies to 
unlock the potential of natural gas as a vital energy source for the country.  
This proposed measure has three main characteristics to develop the country’s 
midstream natural gas industry: 
•
It allows private sector participation across the entire value chain, given
the complex nature of the investment.
•
It allows the government to adapt to evolving market conditions
considering the nascency of the industry, which has the potential to grow
into a mature market.
•
It protects consumers’ interests by incentivizing transparency and
competition and disincentivizes anticompetitive behavior.
Hence, the passage of this measure is sought.   
RUDYS CAESAR G. FARIÑAS I 
November 21, 2022
3:39 pm
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 2
Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Representative Rudys Caesar G. Fariñas I 
AN ACT 
PROVIDING FOR THE NATIONAL ENERGY POLICY AND FRAMEWORK FOR 
THE DEVELOPMENT AND REGULATION OF THE PHILIPPINE MIDSTREAM 
NATURAL GAS INDUSTRY, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
CHAPTER I 
1 
GENERAL PROVISIONS 
2 
3 
SECTION 1. Short Title. – This Act shall be referred to as the “Midstream 
4 
Natural Gas Industry Development Act.”  
5 
6 
SECTION 2.  Declaration of Policy. – It is hereby declared the policy of the 
7 
State to: 
8 
9 
(a) Ensure the country’s energy security by developing diversification of
10 
sources of primary energy supply to various sectors of the economy;
11 
12 
(b) Promote the role of natural gas as an additional energy source and
13 
complementary fuel to variable renewable energy by creating a legal and
14 
regulatory framework that would govern the promotion and development
15 
of the natural gas industry in the country;
16 
17 
(c) Create a regulatory environment that will foster a competitive market for
18 
natural gas;
19 
20 
(d) Encourage the inflow of private capital in the development of the
21 
midstream natural gas industry;
22 
23 
(e) Ensure a safe, secure, reliable, and environmentally responsible operation
24 
of the midstream natural gas value chain to include personnel and user
25 
protection, through the formulation and adoption of local or international
26 
standards on health, safety, security and the environment; and
27 
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1 
(f) Protect midstream end users by mandating transparent and fair rates, 
2 
fees, and charges. 
3 
 
4 
SECTION 3. Scope and Application. – This Act shall apply to the midstream 
5 
natural gas industry specifically the aggregation, supply, importation, 
6 
exportation, receipt, unloading, loading, processing, storage, regasification, 
7 
transmission, bunkering, and transportation of natural gas, in its original or 
8 
liquefied form, from local or foreign sources, and the systems and facilities 
9 
utilized for such.  It shall also apply to the location, construction, improvement, 
10 
operation, 
utilization, 
expansion, 
modification, 
rehabilitation, 
repair, 
11 
maintenance, decommissioning, and abandonment of such systems and 
12 
facilities.  
13 
 
14 
SECTION 4. Definition of Terms. – For purposes of this Act, the following terms 
15 
shall be defined as stated below: 
16 
(a) Affiliate refers to any natural or juridical person who, singly or jointly with 
17 
other natural or juridical persons, directly or indirectly, through one or 
18 
more intermediaries, controls, is controlled by, or is under common control 
19 
with another natural or juridical person. It includes a subsidiary company, 
20 
a parent company, and the subsidiaries, directly or indirectly, of a common 
21 
parent;   
22 
(b) Ancillary reserve refers to the natural gas procured by the natural gas 
23 
transmission utility or the NGTSO, whichever is applicable, necessary in 
24 
the operation of the natural gas transmission system to regulate 
25 
fluctuations in its operating pressure and maintain system stability, 
26 
safety, and efficiency to ensure the continuous transmission of natural gas 
27 
to midstream end-users in accordance with the Natural Gas Transmission 
28 
Code.  It shall be included in the natural gas transmission fee or the 
29 
NGTSO fee, whichever is applicable; 
30 
(c) Anticompetitive behavior refers to any act enumerated under Section 14 
31 
and Section 15 of Republic Act No. 10667, otherwise known as the 
32 
Philippine Competition Act; 
33 
(d) LNG Bunkering refers to the selling of natural gas for use of domestic or 
34 
foreign marine vessels;  
35 
(e) LNG Bunkering Facilities refers to all infrastructure built and designed for 
36 
LNG bunkering;  
37 
(f) Capacity refers to the handling design of a system used in the context of 
38 
its functionality, expressed in a specific measurement such as volume in 
39 
cubic meters or flow rate in normal cubic meters per time unit; 
40 
(g) Control refers to the power to determine the financial and operating 
41 
policies of an entity to benefit from its activities. It is presumed to exist 
42 
when the parent entity owns, directly or through subsidiaries or 
43 
associates, more than fifty percent (50%) of the voting power of an entity. 
44 
It also exists when the parent entity owns fifty percent (50%) or less of the 
45 
voting power of an entity, but has any of the following powers:  
46 
a. Power over more than fifty percent (50%) of the voting rights by 
47 
virtue of an agreement with other investors, 
48 
b. Power to govern the financial and operating policies of the entity 
49 
under a statute or agreement, 
50 
c. Power to appoint or remove the majority of the members of the board 
51 
of directors or equivalent governing body, or  
52 
d. Power to cast the majority of votes at meetings of the board of 
53 
directors or equivalent governing body;  
54 
(h) Dedicated natural gas pipeline refers to a pipeline exclusively utilized by a 
55 
midstream natural gas industry participant or its affiliate for the 
56 
conveyance of natural gas from an LNG terminal or a local natural gas 
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4
production facility to the said midstream natural gas industry participant 
1 
or its affiliate; 
2 
(i) Emergency reserve refers to the amount of natural gas, in its original or 
3 
liquefied form, which may be contracted by midstream end users based on 
4 
public interest, sufficient to ensure a continuous, adequate, and stable 
5 
supply of natural gas for a period in the event of a supply disruption.  The 
6 
period shall be determined in this Act’s implementing rules and 
7 
regulations; 
8 
(j) Importation refers to the bringing of natural gas, in its original or liquefied 
9 
form, into the Philippines from foreign sources; 
10 
(k) Gas aggregation refers to the activity of pooling together various demands 
11 
for natural gas from midstream end users and supplying them with 
12 
natural gas from one or more sources; 
13 
(l) Gas aggregator refers to any natural or juridical person who engages in 
14 
gas aggregation;  
15 
(m) 
Liquefied natural gas (LNG) refers to natural gas which has been 
16 
cooled to a cryogenic temperature, converting it to a liquid state;   
17 
(n) LNG terminal refers to all facilities located onshore or offshore, that are 
18 
used to import, receive, unload, load, process, store, and regasify natural 
19 
gas, in its original or liquefied form, from local or foreign sources. It shall 
20 
include berthing ports, unloading and loading arms, line packs, cryogenic 
21 
pipelines, regasification facilities, and storage tanks, among others;  
22 
(o) LNG Terminal Development Plan refers to a comprehensive plan prepared 
23 
by each LNG terminal owner and operator relating to the location, 
24 
construction, 
improvement, 
operation, 
utilization, 
expansion, 
25 
modification, rehabilitation, repair, maintenance, decommissioning, and 
26 
abandonment of each of its LNG terminals and all its required facilities 
27 
and equipment, taking into consideration, among others, existing and 
28 
projected demand and supply of natural gas; 
29 
(p) LNG Terminal Regulated Third Party Access Code refers to the 
30 
compendium of responsibilities, qualifications, standards, and rules 
31 
promulgated by the Department of Energy (DOE) for regulated third party 
32 
access by one or more third parties to a portion, the entire, or the 
33 
unutilized capacity of an rTPA LNG terminal permit holder, and the 
34 
evaluation of performance of an LNG terminal with respect thereto; 
35 
(q) Midstream end user refers to any natural or juridical person, requiring the 
36 
supply of natural gas, in its original or liquefied form, for resale or own use 
37 
but excluding the retail use of natural gas.  It includes power generation 
38 
plants, industrial and commercial establishments, ecozones, storage 
39 
facilities, bunkering facilities, virtual pipelines, and motor vehicles and 
40 
marine vessels transporting natural gas; 
41 
(r) Midstream natural gas industry refers to the aggregation, supply, 
42 
importation, exportation, receipt, unloading, loading, processing, storage, 
43 
regasification, transmission, bunkering, and transportation of natural gas, 
44 
in its original or liquefied form, but shall exclude the retail of natural gas.  
45 
It utilizes, among others, LNG terminals, dedicated natural gas pipelines, 
46 
natural gas transmission systems, storage facilities, bunkering facilities, 
47 
virtual pipelines, and motor vehicles and marine vessels transporting 
48 
natural gas;  
49 
(s) Midstream Natural Gas Industry Development Plan refers to the 
50 
comprehensive plan for ensuring safe, secure, and reliable supply of 
51 
natural gas, in its original or liquefied form, while establishing the efficient 
52 
operations of the country’s midstream natural gas infrastructure and 
53 
managing demand for natural gas through specific government programs 
54 
and policies.  It shall include the various LNG Terminal Development Plans 
55 
and Natural Gas Transmission Development Plans, and studies on over-
56 
all supply and demand, capacity, and other research necessary in 
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 5
achieving a sound demand and supply projection for natural gas in the 
1 
country; 
2 
(t) Midstream natural gas industry participants refer to the supplier or
3 
importer of natural gas; gas aggregator; owner and operator of LNG
4 
terminal, dedicated natural gas pipeline, natural gas transmission system,
5 
storage and bunkering facilities, virtual pipelines, and motor vehicles and
6 
marine vessels utilized to transport natural gas; the Natural Gas
7 
Transmission System Operator; third parties; and midstream end users;
8 
(u) Natural gas refers to gas obtained from boreholes and wells consisting
9 
primarily of a mixture of methane, ethane, propane, and butane with small
10 
amounts of heavier hydrocarbons and some impurities, notably nitrogen
11 
and complex sulfur compounds and water, carbon dioxide, and hydrogen
12 
sulfide as well as non-conventional gas including gas from bituminous
13 
shale;
14 
(v) Natural Gas Transmission Code refers to the compendium of rules,
15 
procedures, 
requirements, 
regulations, 
and 
minimum 
technical
16 
performance standards governing the safe and reliable location,
17 
construction, 
improvement, 
operation, 
utilization, 
expansion,
18 
modification, rehabilitation, repair, maintenance, decommissioning, and
19 
abandonment of all dedicated natural gas pipelines and natural gas
20 
transmission systems in the country. It also defines and establishes the
21 
relationship of dedicated natural gas pipelines and natural gas
22 
transmission systems with facilities and installations of other midstream
23 
natural gas industry participants, if applicable;
24 
(w) Natural Gas Transmission Development Plan refers to the plan of each
25 
dedicated own use pipeline owner and operator, natural gas transmission
26 
utility, or the Natural Gas Transmission System Operator when applicable,
27 
for managing dedicated own use pipelines, natural gas transmission
28 
systems or the interconnected natural gas transmission system, whichever
29 
is applicable, through efficient planning for its location, construction,
30 
improvement, 
operation, 
utilization, 
expansion, 
modification,
31 
rehabilitation, repair, maintenance, decommissioning, and abandonment;
32 
(x) Natural gas transmission system refers to a network containing pipelines
33 
and other related facilities, owned and operated by a natural gas
34 
transmission utility, which convey natural gas, in its original or liquefied
35 
form, from an LNG terminal or a local natural gas production facility to a
36 
midstream natural gas industry participant;
37 
(y) Natural gas transmission fee refers to the amount paid by midstream
38 
natural gas industry participants for the use of a natural gas transmission
39 
system.  It shall consist of amounts used to defray the costs of location,
40 
construction, 
improvement, 
operation, 
utilization, 
expansion,
41 
modification, rehabilitation, repair, maintenance, decommissioning, and
42 
abandonment of the system, and provide a reasonable rate of return. It
43 
also includes the cost of operating the system while there is no Natural
44 
Gas Transmission System Operator;
45 
(z) Natural Gas Transmission System Operator (NGTSO) refers to a natural or
46 
juridical person responsible for operating and maintaining the
47 
interconnected natural gas transmission system, ensuring the continuous
48 
and reliable delivery of natural gas to midstream natural gas industry
49 
participants, and securing the long-term ability of the system to meet
50 
demand for the transmission of natural gas;
51 
(aa) 
Natural gas transmission utility refers to a natural or juridical 
52 
person who has a franchise granted by law to construct, own, and operate 
53 
a natural gas transmission system within a specified area;  
54 
(bb) 
Negotiated third party access (nTPA) refers to a contractual 
55 
arrangement between the owner and operator of a dedicated natural gas 
56 
pipeline or an own use LNG terminal permit holder and a third party to 
57 


 
 
 
6
allow the use and access to such third party of a specific capacity of a 
1 
dedicated natural gas pipeline or an LNG terminal with an own use permit 
2 
for a fee agreed upon between the two entities.  It does not include 
3 
contractual arrangements entered into by an own use LNG terminal permit 
4 
holder and a third party pursuant to a declaration of unutilized capacity 
5 
by the DOE in accordance with the LNG Terminal Regulated Third Party 
6 
Access Code;  
7 
(cc) 
NGTSO fee refers to the amount paid by midstream natural gas 
8 
industry participants to the NGTSO for its services in operating and 
9 
maintaining the interconnected natural gas transmission system;  
10 
(dd) 
Own use LNG terminal permit holder refers to an LNG terminal 
11 
whose owner and operator has been issued an own use permit; 
12 
(ee) 
Own use permit refers to an authorization issued by DOE to the 
13 
owner and operator of an LNG terminal to exclusively use or allow its 
14 
affiliate to use a specific capacity of the LNG terminal for a specified period 
15 
of time, subject to LNG Terminal Regulated Third Party Access Code; 
16 
(ff) Permit refers to an authorization issued by the DOE, the Energy 
17 
Regulatory Commission (ERC), or the Department of Transportation 
18 
(DOTr) or its attached agencies, whichever is applicable, for the 
19 
aggregation, supply, importation, exportation, receipt, unloading, loading, 
20 
processing, storage, regasification, and bunkering of natural gas, or the 
21 
location, construction, improvement, operation, utilization, expansion, 
22 
modification, rehabilitation, repair, maintenance, decommissioning, and 
23 
abandonment of an LNG terminal, natural gas transmission system, 
24 
dedicated natural gas pipeline, storage facilities, bunkering facilities, 
25 
virtual pipelines, and motor vehicles and marines vessels transporting 
26 
natural gas for a specified period of time; 
27 
(gg) 
Permit holder refers to a natural or juridical person who is granted 
28 
a permit by the DOE, ERC, or DOTr or its attached agencies whichever is 
29 
applicable, to engage in the aggregation, supply, importation, exportation, 
30 
receipt, unloading, loading, processing, storage, regasification, and 
31 
bunkering of natural gas, or the location, construction, improvement, 
32 
operation, utilization, expansion, modification, rehabilitation, repair, 
33 
maintenance, decommissioning, and abandonment of an LNG terminal, 
34 
natural gas transmission system, dedicated natural gas pipeline, storage 
35 
facilities, bunkering facilities, virtual pipelines, and motor vehicles and 
36 
marine vessels transporting natural gas for a specified period of time; 
37 
(hh) 
Philippine National Standard (PNS) refers to the standards 
38 
promulgated by the Department of Trade and Industry (DTI) – Bureau of 
39 
Philippine Standards (BPS) pertaining to product specifications, test 
40 
methods, terminologies, procedures, or practices pursuant to Republic Act 
41 
No. 4109, otherwise known as the Standards Act, and other applicable 
42 
laws, rules and regulations;  
43 
(ii) Regulated third party access refers to a contractual arrangement between 
44 
the following: 
45 
a. An rTPA LNG terminal permit holder or a natural gas transmission 
46 
utility and a third party to allow the latter transparent, fair, 
47 
reasonable, and non-discriminatory use and access of the capacity 
48 
available to third parties of the LNG terminal or the natural gas 
49 
transmission system, 
50 
b. An own use LNG terminal permit holder and a third party pursuant 
51 
to a declaration of unutilized capacity by the DOE in accordance 
52 
with the LNG Terminal Regulated Third Party Access Code, or 
53 
c. A natural gas transmission utility and a third party pursuant to a 
54 
declaration of unutilized capacity by the DOE in accordance with 
55 
the Transmission Regulated Third Party Access Code;  
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(jj) Regulated third party access (rTPA) permit refers to an authorization 
1 
issued by the DOE to the owner and operator of an LNG terminal to offer 
2 
to third parties, the fair, reasonable, and non-discriminatory use and 
3 
access of a specific capacity of its LNG terminal for a specified period of 
4 
time, subject to the LNG Terminal Regulated Third Party Access Code;  
5 
(kk) 
Reserve price refers to the undisclosed rate determined by ERC 
6 
using a methodology pursuant to Section 6 of this Act that serves as the 
7 
price ceiling for the natural gas transmission fee; 
8 
(ll) Retail refers to the sale of natural gas to the general public in relatively 
9 
small quantities for consumption such as the sale of natural gas to motor 
10 
vehicles and to households;   
11 
(mm) 
rTPA LNG terminal permit holder refers to an LNG terminal whose 
12 
owner or operator has been issued an rTPA permit;   
13 
(nn) 
Storage refers to the stocking of natural gas for the purpose of 
14 
regasification, bunkering, reserve, any combination thereof, or any other 
15 
purpose consistent with this Act;  
16 
(oo) 
Storage facilities refer to any equipment or infrastructure used for 
17 
storage; 
18 
(pp) 
Supplier refers to a natural or juridical person authorized by the 
19 
DOE to engage in supply as defined in this Act;  
20 
(qq) 
Supply refers to the trade of indigenous or imported natural gas, in 
21 
its original or liquefied form, and its subsequent sale or transfer to 
22 
midstream natural gas industry participants;  
23 
(rr) Terminal fee refers to the rates, charges, and other similar considerations 
24 
imposed upon third parties for the use and services of any of the following: 
25 
a. The capacity or a portion thereof covered by an rTPA permit of an 
26 
LNG terminal, or 
27 
b. The unutilized capacity or a portion thereof covered by an own use 
28 
permit of an LNG terminal; 
29 
(ss) 
Third party refers to a midstream natural gas industry participant 
30 
who is not the owner, operator, or affiliate of the owner and operator of an 
31 
LNG terminal, dedicated natural gas pipeline, or natural gas transmission 
32 
system; 
33 
(tt) Transmission refers to the conveyance of natural gas either through a 
34 
dedicated natural gas pipeline or a natural gas transmission system; 
35 
(uu) 
Transmission Regulated Third Party Access Code refers to the 
36 
compendium of responsibilities, qualifications, standards, and rules 
37 
promulgated by the ERC for regulated third party access by one or more 
38 
third parties to a portion, the entire, or the unutilized capacity of a natural 
39 
gas transmission system, and the evaluation of performance of a natural 
40 
gas transmission utility with respect thereto;  
41 
(vv) 
Unutilized capacity refers to a portion of the capacity of an LNG 
42 
terminal, with an own use permit, an rTPA permit or both, or a natural 
43 
gas transmission system, set apart for the use of the LNG terminal owner 
44 
and operator or a third party with regulated third party access to the LNG 
45 
terminal or the natural gas transmission system, which remains unused 
46 
after a reasonable period of time and declared as such by the DOE or the 
47 
ERC pursuant to Sections 5 and 6 of this Act and the LNG Terminal 
48 
Regulated Third Party Access Code and the Transmission Regulated Third 
49 
Party Access Code, whichever is applicable; and 
50 
(ww) 
Virtual pipelines refer to alternative methods of transporting natural 
51 
gas using modules coupled to mobile platforms such as motor vehicles, 
52 
marine vessels, or rail platforms. 
53 
 
54 
CHAPTER II 
55 
POWERS AND RESPONSIBILITIES OF GOVERNMENT AGENCIES 
56 
 
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SECTION 5. Powers and Responsibilities of the Department of Energy (DOE). 
1 
– In addition to its functions under Republic Act No. 7638, otherwise known as 
2 
the Department of Energy Act of 1992, the DOE shall be the lead implementing 
3 
agency for this Act.  Towards this end, it shall: 
4 
(a) Supervise and monitor the development of the midstream natural gas 
5 
industry, and ensure the security and sufficiency of the supply of natural 
6 
gas for local demand; 
7 
(b) Require the annual submission of, review, and approve LNG Terminal 
8 
Development Plans and Natural Gas Transmission Development Plans: 
9 
Provided, That the specific guidelines and timeline for the approval of these 
10 
plans shall be determined in this Act’s implementing rules and regulations 
11 
taking into consideration the policy declarations of this Act and upon 
12 
consultation with other relevant government agencies, midstream natural 
13 
gas industry participants, and other public and private stakeholders; 
14 
(c) Prepare a Midstream Natural Gas Industry Development Plan based on the 
15 
various LNG Terminal Development Plans and Natural Gas Transmission 
16 
Development Plans within two (2) years from the effectivity of this Act’s 
17 
implementing rules and regulations, upon consultation with other relevant 
18 
government agencies, midstream natural gas industry participants, and 
19 
other public and private stakeholders. The Midstream Natural Gas 
20 
Industry Development Plan shall be reviewed and updated annually, and 
21 
integrated into the Philippine Energy Plan; 
22 
(d) Promulgate the PNS or identify and adopt other international standards 
23 
adopted as PNS by the DTI-BPS, together with relevant government 
24 
agencies and upon consultation with midstream natural gas industry 
25 
participants and other public and private stakeholders, within eighteen 
26 
(18) months from the effectivity of this Act’s implementing rules and 
27 
regulations, for the following: 
28 
a. Natural gas, in its original or liquefied form,  
29 
b. Location, 
construction, 
improvement, 
operation, 
utilization, 
30 
expansion, 
modification, 
rehabilitation, 
repair, 
maintenance, 
31 
decommissioning, and abandonment of all LNG terminals, 
32 
c. Storage and bunkering of natural gas and its respective facilities,  
33 
d. Virtual pipelines, and  
34 
e. Motor vehicles and marine vessels transporting natural gas; 
35 
(e) Ensure compliance with the health, safety, security, and environmental 
36 
standards of the following, together with the Department of Environment 
37 
and Natural Resources (DENR), Department of Health (DOH), and other 
38 
relevant government agencies: 
39 
a. Natural gas, in its original or liquefied form, 
40 
b. Location, 
construction, 
improvement, 
operation, 
utilization, 
41 
expansion, 
modification, 
rehabilitation, 
repair, 
maintenance, 
42 
decommissioning, and abandonment of all LNG terminals, and  
43 
c. Storage and bunkering of natural gas and its respective facilities; 
44 
(f) Convene and co-chair with DTI-BPS, within two (2) months from the 
45 
effectivity of this Act, a technical working group comprised of relevant 
46 
government agencies to include the ERC, DTI, DOTr, DENR, DOH, 
47 
Department of Labor and Employment (DOLE), Department of Interior and 
48 
Local Government (DILG), their respective attached agencies, midstream 
49 
natural gas industry participants, and other relevant public and private 
50 
stakeholders to ensure consistent and streamlined standards and 
51 
regulations in the midstream natural gas industry. The members of the 
52 
technical working group shall fully cooperate and collaborate in the 
53 
creation, promulgation, and streamlining of standards and regulations; 
54 
(g) Promulgate the guidelines for the establishment of safety and exclusion 
55 
zones of LNG terminals, and determine such safety and exclusion zone for 
56 
every LNG terminal, in consultation with the technical working group, 
57 


 
 
 
9
relevant government agencies, local government units, and public and 
1 
private stakeholders; 
2 
(h) Evaluate and act on applications for the location, construction, 
3 
improvement, 
operation, 
utilization, 
expansion, 
modification, 
4 
rehabilitation, repair, maintenance, decommissioning, and abandonment 
5 
of all LNG terminals as well as storage facilities and bunkering facilities; 
6 
(i) Issue the following: 
7 
a. Permits for the aggregation, supply, importation, exportation, 
8 
receipt, unloading, loading, processing, storage, regasification, and 
9 
bunkering of natural gas, in its original or liquefied form in 
10 
accordance with this Section, and  
11 
b. Own use and rTPA permits to owners and operators of LNG 
12 
terminals; 
13 
(j) Establish a methodology and timeframe for the determination of the 
14 
unutilized capacity of LNG terminals, which shall be integrated in the LNG 
15 
Terminal Regulated Third Party Access Code, taking into consideration the 
16 
following: 
17 
a. Reasonable period to use the capacity,  
18 
b. Existing market demand, and  
19 
c. Existing contracts; 
20 
(k) Promulgate the LNG Terminal Regulated Third Party Access Code, within 
21 
one (1) year from the effectivity of this Act’s implementing rules and 
22 
regulations, and upon consultation with other relevant government 
23 
agencies, midstream natural gas industry participants, and other public 
24 
and private stakeholders, and ensure compliance therewith.  The LNG 
25 
Terminal Regulated Third Party Access Code shall be reviewed and 
26 
updated regularly.  The following principles shall govern the creation of 
27 
this code: 
28 
a. Reliable and continuous supply of natural gas, and  
29 
b. Transparent, fair, reasonable, and non-discriminatory use and 
30 
access;  
31 
(l) Declare the unutilized capacity of an LNG terminal and mandate regulated 
32 
third party access for such in accordance with the LNG Terminal Regulated 
33 
Third Party Access Code;  
34 
(m) 
Determine minimum guidelines to ensure the transparent, fair, 
35 
reasonable, and non-discriminatory conduct of competitive selection 
36 
processes by owners and operators of LNG terminal: Provided, That these 
37 
minimum guidelines shall not include the mode of competitive selection 
38 
process;  
39 
(n) Approve or disapprove any sale, assignment, or transfer of control to 
40 
another entity by a midstream natural gas industry participant with a DOE 
41 
issued permit within ninety (90) calendar days from submission of 
42 
complete documentary requirements.  Concomitantly, the DOE may 
43 
require from any midstream natural gas industry participant with a DOE 
44 
issued permit the prior disclosure of any sale, assignment, or transfer of 
45 
ownership or direct or indirect interests, rights, or participation not 
46 
amounting to control to another entity.  In both these cases, the DOE may 
47 
review, modify, cancel, approve, or disapprove any permit it has issued 
48 
taking into consideration the legal, technical, and financial qualifications 
49 
of the purchaser, assignee, or transferee and its compliance with its own 
50 
use or rTPA permit or other DOE issued permits under this Act and 
51 
existing laws, rules and regulations; 
52 
(o) Determine the qualifications of and procedure for the competitive selection 
53 
of a single independent NGTSO taking into consideration Section 21 of this 
54 
Act, upon consultation with relevant government agencies, midstream 
55 
natural gas industry participants, and other public and private 
56 


 
 
 
10
stakeholders, and undertake its selection upon the interconnection of 
1 
natural gas transmission systems; 
2 
(p) Require the submission of the following information from suppliers, 
3 
importers, aggregators, and owners and operators of LNG terminals, 
4 
storage facilities, and bunkering facilities, whichever is applicable, subject 
5 
to Section 31 of this Act: 
6 
a. Progress and status reports on location, construction, improvement, 
7 
operation, 
expansion, 
modification, 
rehabilitation, 
repair, 
8 
maintenance, 
decommissioning, 
and 
abandonment 
of 
LNG 
9 
terminals and storage and bunkering facilities, 
10 
b. Regular reports on the following: 
11 
i. Compliance with health, safety, security, and environmental 
12 
standards, 
13 
ii. Utilization of the LNG terminal by its owner and operator, the 
14 
owner and operator’s affiliates, and third parties, whichever is 
15 
applicable, and 
16 
iii. Compliance with the LNG Terminal Regulated Third Party 
17 
Access Code to include compliance with DOE directive to 
18 
subject an unutilized capacity to regulated third party access;  
19 
c. Supply and demand of natural gas with respect to their own facilities 
20 
or operations,  
21 
d. Volumes of specific inventories to include levels of importation and 
22 
emergency reserve, 
23 
e. Progress and status reports on mitigation measures and responses 
24 
in relation to accidents and other emergency incidents, 
25 
f. Mode of competitive selection of third parties for rTPA LNG terminal 
26 
permit holders, reports on competitive selection processes 
27 
undertaken, and status of utilization by third parties of the LNG 
28 
terminal with an rTPA permit: Provided, That the mode for each 
29 
competitive selection process shall be determined by each rTPA LNG 
30 
terminal permit holder: Provided further, That each competitive 
31 
selection process shall be transparent, fair, reasonable, and non-
32 
discriminatory, and  
33 
g. Other data and information necessary to the performance of the 
34 
duties and functions of DOE; 
35 
(q) Determine the necessity of and then direct the interconnection of natural 
36 
gas transmission systems based on the Philippine Energy Plan, Midstream  
37 
Natural Gas Development Plan, and the Natural Gas Transmission 
38 
Development Plans, taking into consideration the maturity of the industry, 
39 
the existing natural gas transmission systems’ infrastructure, and the cost 
40 
efficiency of interconnection, and upon consultation with the ERC, other 
41 
relevant 
government 
agencies, 
midstream 
natural 
gas 
industry 
42 
participants, and other public and private stakeholders;  
43 
(r) Ensure compliance with the publication and unbundling of the terminal 
44 
fee in accordance with Section 24 of this Act;  
45 
(s) Ensure and review compliance with, and investigate, motu proprio or upon 
46 
complaint, any non-compliance with this Act including any permit DOE 
47 
has issued in relation hereto, its rules and regulations, the LNG Terminal 
48 
Regulated Third Party Access Code, and any other issuance promulgated 
49 
pursuant to the DOE’s powers under this Act, except those under the 
50 
jurisdiction of the ERC as provided under Section 6 herein.  Thereafter, 
51 
the DOE may penalize, suspend, or revoke, after due notice and hearing 
52 
any permit it has issued; 
53 
(t) Endorse the findings of investigations against midstream natural gas 
54 
industry participants, for any of the following:  
55 
a. Anticompetitive 
behavior 
before 
the 
Philippine 
Competition 
56 
Commission (PCC), or  
57 


 
 
 
11
b. Violations of the provisions of this Act and other applicable laws, 
1 
rules, and regulations before the ERC, other quasi-judicial agencies, 
2 
or the courts; and 
3 
(u) Perform all other acts that are analogous to the aforementioned and in 
4 
furtherance of the implementation of this Act.  
5 
 
6 
SECTION 6. Powers and Responsibilities of the Energy Regulatory 
7 
Commission (ERC). – In addition to its functions under Republic Act No. 9136, 
8 
otherwise known as the Electric Power Industry Reform Act of 2001, the ERC 
9 
shall have the authority to: 
10 
(a) Promulgate the PNS or identify and adopt other international standards 
11 
adopted as PNS by the DTI-BPS, together with relevant government 
12 
agencies and upon consultation with midstream natural gas industry 
13 
participants and other public and private stakeholders, within eighteen 
14 
(18) months from the effectivity of this Act’s implementing rules and 
15 
regulations, for the following: 
16 
a. Dedicated natural gas pipelines, and 
17 
b. Natural gas transmission systems;  
18 
(b) Ensure compliance with the health, safety, security, and environmental 
19 
standards of the following, together with the Department of Environment 
20 
and Natural Resources (DENR), Department of Health (DOH), and other 
21 
relevant government agencies: 
22 
a. Dedicated natural gas pipelines, and 
23 
b. Natural gas transmission systems;  
24 
(c) Participate in the technical working group convened by DOE pursuant to 
25 
Section 5 of this Act; 
26 
(d) Evaluate and act on applications for the location, construction, 
27 
improvement, 
operation, 
utilization, 
expansion, 
modification, 
28 
rehabilitation, repair, maintenance, decommissioning, and abandonment 
29 
of dedicated natural gas pipelines and natural gas transmission systems; 
30 
(e) Issue permits for the transmission of natural gas to include certificates of 
31 
public convenience and necessity (CPCN) to natural gas transmission 
32 
utilities;  
33 
(f) Establish a methodology and timeframe for the determination of the 
34 
unutilized capacity of natural gas transmission systems, which shall be 
35 
integrated in the Transmission Regulated Third Party Access Code, taking 
36 
into consideration the following: 
37 
a. Reasonable period to use the capacity,  
38 
b. Existing market demand, and  
39 
c. Existing contracts; 
40 
(g) Promulgate the Transmission Regulated Third Party Access Code, within 
41 
one (1) year from the effectivity of this Act’s implementing rules and 
42 
regulations, and upon consultation with other relevant government 
43 
agencies, midstream natural gas industry participants, and other public 
44 
and private stakeholders, and ensure compliance therewith;  
45 
(h) Promulgate the Natural Gas Transmission Code and Transmission 
46 
Regulated Third Party Access Code, within one (1) year from the effectivity 
47 
of this Act’s implementing rules and regulations, and upon consultation 
48 
with other relevant agencies, midstream natural gas industry participants, 
49 
and other public and private stakeholders, and ensure compliance 
50 
therewith.  The Natural Gas Transmission Code and the Transmission 
51 
Regulated Third Party Access Code which shall be reviewed and updated 
52 
regularly.  The following principles shall govern the creation of these codes: 
53 
a. Reliable and continuous supply of natural gas, and 
54 
b. Transparent, fair, reasonable, and non-discriminatory use and 
55 
access; 
56 


 
 
 
12
(i)  Declare the unutilized capacity of a natural gas transmission system and 
1 
mandate regulated third party access for such in accordance with the 
2 
Transmission Regulated Third Party Access Code; 
3 
(j) Determine minimum guidelines to ensure the transparent, fair, 
4 
reasonable, and non-discriminatory conduct of competitive selection 
5 
processes by natural gas transmission utilities: Provided, That these 
6 
minimum guidelines shall not include the mode of competitive selection 
7 
process;  
8 
(k) Approve or disapprove any plan of a natural gas transmission utility, an 
9 
owner and operator of a dedicated natural gas pipeline, and the NGTSO to 
10 
sell, assign, or transfer control to another entity.  Concomitantly, the ERC 
11 
may require from a natural gas transmission utility, an owner and 
12 
operator of a dedicated natural gas pipeline, and the NGTSO the prior 
13 
disclosure of any sale, assignment, or transfer of ownership or direct or 
14 
indirect interests, rights, or participation to another entity.  In both these 
15 
cases, the ERC may review, modify, cancel, approve, or disapprove any 
16 
permit it has issued taking into consideration the legal, technical, and 
17 
financial qualifications of the purchaser, assignee, or transferee and its 
18 
compliance with its ERC issued permits under this Act and existing laws, 
19 
rules and regulations; 
20 
(l) Require the submission of the following information from the owner and 
21 
operator of dedicated natural gas pipelines, the natural gas transmission 
22 
utility, and the NGTSO, whichever is applicable, subject to Section 31 of 
23 
this Act:  
24 
a. Progress and status reports on location, construction, improvement, 
25 
operation, 
expansion, 
modification, 
rehabilitation, 
repair, 
26 
maintenance, decommissioning, and abandonment of dedicated 
27 
natural gas pipelines, natural gas transmission systems, and the 
28 
interconnected natural gas transmission system, 
29 
b. Regular reports on the following: 
30 
c. Compliance with health, safety, security, and environmental 
31 
standards, 
32 
d. Utilization of the dedicated natural gas pipeline and natural gas 
33 
transmission system by its owner and operator, the owner and 
34 
operator’s affiliates, and third parties, whichever is applicable, 
35 
e. Compliance with the Transmission Regulated Third Party Access 
36 
Code to include compliance with DOE directive to subject an 
37 
unutilized capacity to regulated third party access; 
38 
f. Supply and demand of natural gas with respect to their own facilities 
39 
or operations, 
40 
g. Volumes of specific inventories to include levels of ancillary reserve, 
41 
when applicable,  
42 
h. Compliance with health, safety, security, and environmental 
43 
standards, and activities in relation thereto, 
44 
i. Progress and status reports on mitigation measures and responses 
45 
in relation to accidents and other significant or emergency incidents; 
46 
j. Mode of competitive selection of third parties for natural gas 
47 
transmission utilities, reports on competitive selection processes 
48 
undertaken to include the natural gas transmission fee, and status 
49 
of utilization by third parties: Provided, That the mode for each 
50 
competitive selection process shall be determined by each natural 
51 
gas transmission utility: Provided further, That each competitive 
52 
selection process shall be transparent, fair, reasonable, and non-
53 
discriminatory, 
54 
k. Billed and collected amounts of the natural gas transmission fee and 
55 
NTSO fee, whichever is applicable, and 
56 


 
 
 
13
l. Other documents, data, and information necessary to the 
1 
performance by ERC of its functions under this Act; 
2 
(m) 
Ensure and review compliance with, and investigate, motu proprio, 
3 
upon complaint, or upon endorsement of any government agency, any 
4 
non-compliance with this Act including any permit ERC has issued in 
5 
relation hereto, its rules and regulations, the Natural Gas Transmission 
6 
Code, the Transmission Regulated Third Party Access Code, and any other 
7 
issuance promulgated pursuant to the ERC’s powers under this Act, 
8 
except those under the jurisdiction of the DOE as provided under Section 
9 
5 herein.  Thereafter, the ERC may penalize, suspend, or revoke, after due 
10 
notice and hearing any permit it has issued; 
11 
(n) Endorse the findings of investigations on any anticompetitive behavior of 
12 
an owner and operator of a dedicated natural gas pipeline, the natural gas 
13 
transmission utility, and the NGTSO to the PCC; 
14 
(o) Exercise its rate-setting power through the determination and regular 
15 
review of the following:  
16 
a. Reserve price for the natural gas transmission fee.  It shall remain 
17 
undisclosed until the winning bidder is declared, and  
18 
b. NGTSO fee. 
19 
(p) The ERC shall notify and afford relevant stakeholders the opportunity to 
20 
be heard in the following: 
21 
a. Methodology for the determination of the reserve price, and 
22 
b. Determination of the NGTSO fee; 
23 
(q) Ensure compliance with the publication and unbundling of the natural 
24 
gas transmission fee and the NGTSO fee imposed by the natural gas 
25 
transmission utilities, and the NGTSO respectively, in accordance with 
26 
Section 24 of this Act; 
27 
(r) Review regularly the performance of natural gas transmission utilities and 
28 
the NGTSO, when applicable, including the quality of its service and 
29 
compliance with its approved Natural Gas Transmission Development Plan 
30 
and its powers and functions pursuant to Chapter V of this Act;  
31 
(s) Exercise exclusive jurisdiction over all matters pertaining to rate setting in 
32 
this Act taking into consideration the policy of full recovery of prudent and 
33 
reasonable economic costs with a reasonable rate of return or such other 
34 
principles that promote efficiency and other internationally accepted rate 
35 
setting methodology; 
36 
(t) Exercise overall regulatory supervision over dedicated natural gas 
37 
pipelines, natural gas transmission systems, and the NGTSO; and 
38 
(u) Perform all other acts that are analogous to the foregoing and in 
39 
furtherance of the implementation of this Act. 
40 
 
41 
SECTION 7. Powers and Responsibilities of the Department of Environment 
42 
and Natural Resources. – In addition to its functions under Executive Order No. 
43 
192, otherwise known as the Reorganization Act of the Department of 
44 
Environment and Natural Resources,  and other applicable laws, the DENR,  
45 
together with the DOE, the ERC, or the DOTr, shall ensure and monitor 
46 
compliance with the environmental standards for the location, construction, 
47 
improvement, operation, utilization, expansion, modification, rehabilitation, 
48 
repair, maintenance, decommissioning, and abandonment of LNG terminals, 
49 
natural gas transmission systems, dedicated natural gas pipelines, storage 
50 
facilities, bunkering facilities, virtual pipelines, and motor vehicles and marine 
51 
vessels transporting, storing or processing natural gas, in its original state or 
52 
liquefied form, and all related equipment and facilities. 
53 
 
54 
SECTION 8. Powers and Responsibilities of the Department of Health. – In 
55 
addition to its functions under Executive Order No. 317, Series of 1941, entitled 
56 
Organizing the Department of Health and Public Welfare, as amended, and 
57 


 
 
 
14
Republic Act No. 11223, otherwise known as the Universal Health Care Act, the 
1 
DOH, together with the DOE, the ERC or the DOTr, shall: 
2 
(a) Ensure and monitor compliance with the health standards for the location, 
3 
construction, improvement, operation, utilization, expansion, modification, 
4 
rehabilitation, repair, maintenance, decommissioning, and abandonment of 
5 
LNG terminals, natural gas transmission systems, dedicated natural gas 
6 
pipelines, storage facilities, bunkering facilities, virtual pipelines, and motor 
7 
vehicles and marine vessels transporting, storing, or processing natural gas, 
8 
in its original state or liquefied form, and all related equipment and facilities; 
9 
(b) Recommend standards, rules, and regulations in the conduct of health risk 
10 
assessment studies in cases of natural gas accidents; 
11 
(c) Develop guidelines, policies, and health standards on the treatment and 
12 
management of patients affected by natural gas accidents; and 
13 
(d) Require health data and information from LNG terminals, natural gas 
14 
transmission systems, dedicated natural gas pipelines, storage facilities, and 
15 
bunkering facilities, virtual pipelines, and motor vehicles and marine vessels 
16 
transporting, storing, or processing natural gas, in its original state or 
17 
liquefied form, and all related equipment and facilities. 
18 
 
19 
SECTION 9. Powers and Responsibilities of the Department of Trade and 
20 
Industry – Bureau of Philippine Standards. – In addition to its functions under 
21 
Republic Act No. 4109, otherwise known as the Standards Act, the DTI-BPS, 
22 
shall act as the Co-Chairperson of the technical working group created pursuant 
23 
to Section 5 of this Act, and together with the DOE, the ERC, or the DOTR, 
24 
determine, develop, formulate, promulgate, and revise the Philippine National 
25 
Standards, or identify and adopt international standards as PNS, for natural gas, 
26 
in its original or liquefied form, LNG terminals, dedicated natural gas pipelines, 
27 
natural gas transmission systems, storage facilities, bunkering facilities, virtual 
28 
pipelines, and motor vehicles and marine vessels transporting, storing, or 
29 
processing natural gas, in its original state or liquefied form, and all related 
30 
equipment and facilities.  
31 
 
32 
SECTION 10. Powers and Responsibilities of the Department of 
33 
Transportation and its Attached Agencies. – In addition to its functions under 
34 
Executive Order No. 125, series of 1987 otherwise known as the Reorganization 
35 
Act of the Ministry of Transportation and Communications, as amended, and 
36 
other applicable laws, the DOTr or its attached agencies such as the Land 
37 
Transportation Office, Land Transportation Franchising and Regulatory Board, 
38 
and Maritime Industry Authority, in coordination with the DOE, DENR, DOH, 
39 
DTI-BPS, and other relevant government agencies, shall issue the appropriate 
40 
guidelines and regulations and the applicable permits, licenses, certificates, or 
41 
authorizations to virtual pipelines, motor vehicles and marine vessels 
42 
transporting, storing or processing natural gas, in its original state or liquefied 
43 
form, as well as marine facilities used to import, receive, unload, load, transport, 
44 
process,  and store natural gas in its original or liquefied form, including those 
45 
utilized as offshore LNG terminals.  The DOTr shall monitor and ensure 
46 
compliance therewith. 
47 
 
48 
SECTION 11. Powers and Responsibilities of the Philippine Competition 
49 
Commission (PCC). – In addition to its functions under Republic Act No. 10667, 
50 
otherwise known as the Philippine Competition Act, the PCC shall exercise 
51 
primary and exclusive jurisdiction over any anticompetitive behavior of 
52 
midstream natural gas industry participants. 
53 
 
54 
 
55 
CHAPTER III 
56 
MIDSTREAM NATURAL GAS INDUSTRY PARTICIPANTS 
57 


 
 
 
15
 
1 
SECTION 12. Responsibilities of Midstream Natural Gas Industry 
2 
Participants. – All midstream natural gas industry participants shall:  
3 
(a) Adhere to all health, safety, security, and environmental standards and all 
4 
codes, rules, regulations, and issuances promulgated pursuant to Chapter 
5 
II of this Act;  
6 
(b) Comply with all obligations and responsibilities under this Act to include 
7 
reportorial requirements and submissions pursuant to Chapter II of this 
8 
Act;  
9 
(c) Participate as a member of the technical working group pursuant to 
10 
Section 5 of this Act; 
11 
(d) Unbundle their respective fees, if applicable, pursuant to Sections 5, 6, 
12 
and 24 of this Act; and 
13 
(e) Not engage in any anticompetitive behavior.   
14 
 
15 
CHAPTER IV 
16 
LNG TERMINALS 
17 
 
18 
SECTION 13. Importation and Receipt of Natural Gas through LNG 
19 
Terminals. – Imported natural gas, in its liquefied form, shall only be received, 
20 
unloaded, loaded, processed, stored, and regasified in, and then transmitted, 
21 
transported, and conveyed in accordance with this Act. 
22 
 
23 
SECTION 14.  Safety and Exclusion Zone. – All LNG terminals shall have a 
24 
safety and exclusion zone to be determined by the DOE in consultation with the 
25 
technical working group created under Section 5 of this Act, relevant government 
26 
agencies, local government units, and public and private stakeholders.    
27 
 
28 
SECTION 15. LNG Terminal Owner and Operator. – An LNG terminal may have 
29 
a separate owner and operator.  The LNG terminal owner and operator, should 
30 
they be separate entities, shall be treated as one and the same entity insofar as 
31 
permits, licenses, certificates, and authorizations are concerned, as well as in 
32 
the exercise of rights and compliance with obligations, standards, regulations, 
33 
guidelines, and codes imposed by this Act, its implementing rules and 
34 
regulations, and other relevant laws and issuances.  
35 
 
36 
SECTION 16. Use and Access of LNG Terminals. – The use and access of LNG 
37 
terminals shall be regulated pursuant to this Act, while the terminal fee shall be 
38 
unbundled in accordance with Section 25 herein and unregulated.  All owners 
39 
and operators of LNG terminals shall annually submit their LNG Terminal 
40 
Development Plan to DOE pursuant to Section 5 of this Act.   
41 
 
42 
The DOE shall issue own use and rTPA permits to owners and operators of LNG 
43 
terminals. The owner and operator of an LNG terminal shall have the option to 
44 
apply for and hold an own use permit, an rTPA permit, or both permits 
45 
simultaneously for each LNG terminal, and perform the functions of an own use 
46 
LNG terminal permit holder pursuant to Section 17 of this Act and an rTPA LNG 
47 
terminal permit holder pursuant to Section 18 of this Act, to the extent of the 
48 
capacity allowed by and during the length of the time specified in each type of 
49 
permit, and in accordance with the LNG Terminal Regulated Third Party Access 
50 
Code. 
51 
 
52 
Each type of permit shall specify the capacity and length of time covered by the 
53 
permit: Provided, That the total capacity of all permits held by an owner and 
54 
operator of an LNG terminal for each LNG terminal shall not exceed the 
55 
maximum capacity of such LNG terminal.  The unutilized capacity of an owner 
56 
and operator or its affiliate covered by an own use LNG terminal permit shall be 
57 


 
 
 
16
opened to third parties through the issuance of an rTPA permit and pursuant to 
1 
the LNG Terminal Regulated Third Party Access Code. The unutilized capacity 
2 
by a third party covered by an rTPA LNG terminal permit shall be opened to other 
3 
third parties pursuant to the LNG Terminal Regulated Third Party Access Code.  
4 
 
5 
SECTION 17. Own Use LNG Terminal. – An own use LNG terminal permit 
6 
holder shall:  
7 
(a) Exclusively utilize the capacity allowed by and during the length of time 
8 
specified in the own use permit, and may allow its affiliates to do the same; 
9 
and 
10 
(b) Not enter into an nTPA or any similar arrangement with third parties or 
11 
otherwise grant use and access of its facilities to such third parties to the 
12 
extent of the capacity allowed and during the length of time specified in 
13 
the own use permit, subject to Section 16 of this Act and the LNG Terminal 
14 
Regulated Third Party Access Code. 
15 
 
16 
SECTION 18. Regulated Third Party Access LNG Terminal. – The issuance of 
17 
an rTPA permit to an owner and operator of an LNG terminal shall take into 
18 
consideration the capacity and utilization of the LNG terminal, current 
19 
midstream end users, existing market conditions, and other relevant information 
20 
with the end in view of enabling competition in the natural gas industry. The use 
21 
and access of the capacity covered by an rTPA permit shall be open to all third 
22 
parties subject to the payment of a terminal fee. An rTPA LNG terminal permit 
23 
holder shall: 
24 
(a) Publicly disclose the capacity available to and utilization by third parties 
25 
in accordance with the reportorial requirements under this Act and the 
26 
LNG Terminal Regulated Third Party Access Code;  
27 
(b) Determine the mode of competitive selection of third parties: Provided, 
28 
That each LNG terminal shall determine its own competitive selection 
29 
process which shall be transparent, fair, reasonable, and non-
30 
discriminatory subject to the reportorial requirements under this Act;  
31 
(c) Provide regulated third party access to the extent of the capacity allowed 
32 
by and during the length of time specified in its rTPA permit; and  
33 
(d) Not give any undue preference or advantage to any third party, whether in 
34 
rates, terms, conditions, or special privileges. 
35 
 
36 
CHAPTER V 
37 
TRANSPORT AND TRANSMISSION OF NATURAL GAS 
38 
 
39 
SECTION 19. Transport of Natural Gas. – Natural gas, in its original or liquefied 
40 
form, may be transported within the country through virtual pipelines, motor 
41 
vehicles, and marine vessels in accordance with this Act. The use, access, and 
42 
fees for the transportation of natural gas shall be unregulated but shall be 
43 
subject to the permits, licenses, certificates, authorizations, standards, 
44 
regulations, and guidelines promulgated pursuant to Chapter II of this Act. 
45 
 
46 
SECTION 20. Transmission of Natural Gas. – Natural gas may be transmitted 
47 
through dedicated natural gas pipelines or natural gas transmission systems 
48 
either from an LNG terminal or a local natural gas production facility.  
49 
 
50 
SECTION 21. Dedicated Natural Gas Pipelines. – The ownership and operation 
51 
of a dedicated natural gas pipeline shall not be considered a public utility and 
52 
shall not require a legislative franchise, but shall require a permit in accordance 
53 
with Section 6 of this Act.  Its use, access, and fee for use shall be unregulated, 
54 
but shall be subject to permits, licenses, certificates, authorizations, standards, 
55 
regulations, guidelines, codes, and reportorial requirements as provided in this 
56 
Act.  The owner and operator of a dedicated natural gas pipeline shall:  
57 


 
 
 
17
(a) Exclusively utilize the capacity of its dedicated natural gas pipeline or 
1 
allow its affiliates to do the same;  
2 
(b) Not enter into an nTPA or any similar arrangement with third parties or 
3 
otherwise grant use and access of its facilities to such third parties; and 
4 
(c) Inform the ERC of its intent to convert its facilities to a natural gas 
5 
transmission system simultaneous with its application for a legislative 
6 
franchise as a natural gas transmission utility.  
7 
 
8 
SECTION 22. Natural Gas Transmission Systems. – The use, access, and 
9 
terminal fee of a natural gas transmission system shall be regulated.  The 
10 
ownership and operation of a natural gas transmission system shall be 
11 
considered a public utility and shall require a legislative franchise. The issuance 
12 
of a CPCN to a natural gas transmission utility shall take into consideration its 
13 
legal, technical, and financial capability. 
14 
 
15 
The use and access to the entire capacity of a natural gas transmission system 
16 
shall be open to all third parties for a natural gas transmission fee, subject to  
17 
the reserve price of the ERC in accordance with Section 6 of this Act: Provided, 
18 
That in the case of a dedicated natural gas pipeline that converts its facilities 
19 
into a natural gas transmission system, existing contracts with affiliates for the 
20 
use of the pipeline at the time of the effectivity of such franchise shall be allowed 
21 
to continue until the end of the contract, which shall not be subject to any 
22 
extension. 
23 
 
24 
A natural gas transmission utility shall:  
25 
(a) Regularly disclose to the public the capacity available for and utilization 
26 
by third parties in accordance with the reportorial requirements under this 
27 
Act and the Transmission Regulated Third Party Access Code;  
28 
(b) Determine the mode of and conduct a competitive selection of third parties. 
29 
Provided, That each natural gas transmission utility shall determine its 
30 
own competitive selection process which shall be transparent, fair, 
31 
reasonable, 
and 
non-discriminatory, 
subject 
to 
the 
reportorial 
32 
requirements under this Act; 
33 
(c) Ensure that the winning bid does not go beyond the reserve price 
34 
determined by ERC pursuant to Section 6 of this Act; 
35 
(d) Provide transparent, fair, reasonable, and non-discriminatory use and 
36 
access to third parties;  
37 
(e) Not give any undue preference or advantage to any third party, whether in 
38 
rates, terms, conditions, or special privileges;  
39 
(f) Submit annually its Natural Gas Transmission Development Plan to DOE 
40 
for review and approval, or the NGTSO, whichever is applicable, pursuant 
41 
to Sections 5 and 23 of this Act;  
42 
(g) Assign to the NGTSO the operation and maintenance of its natural gas 
43 
transmission system upon direction of the ERC after the interconnection 
44 
of natural gas transmission systems and the selection of the NGTSO; and 
45 
(h) When applicable, inform and coordinate with the NGTSO for the location, 
46 
construction, 
improvement, 
operation, 
utilization, 
expansion, 
47 
modification, rehabilitation, repair, maintenance, decommissioning, and 
48 
abandonment of any part of the natural gas transmission system to be 
49 
undertaken in accordance with its submitted National Gas Transmission 
50 
Development Plan.  
51 
 
52 
SECTION 23. Natural Gas Transmission System Operator. – The DOE, based 
53 
on the Philippine Energy Plan, the Midstream Natural Gas Industry Development 
54 
Plan, and the various Natural Gas Transmission Development Plans shall 
55 
determine the necessity of and then direct the interconnection of natural gas 
56 
transmission systems pursuant to Section 5 of this Act. The DOE shall thereafter 
57 


 
 
 
18
select a single independent NGTSO.  The NGTSO shall not be an affiliate of any 
1 
LNG terminal owner and operator, natural gas transmission utility, or any 
2 
midstream end-user.  The NGTSO shall: 
3 
(a) Operate and manage the interconnected natural gas transmission system 
4 
in accordance with the Natural Gas Transmission Code and Transmission 
5 
Regulated Third Party Access Code;  
6 
(b) Coordinate with natural gas transmission utilities for the location, 
7 
construction, 
improvement, 
operation, 
utilization, 
expansion, 
8 
modification, rehabilitation, repair, maintenance, decommissioning, and 
9 
abandonment of any part of the natural gas transmission system in 
10 
accordance with their submitted Natural Gas Transmission Development 
11 
Plan; 
12 
(c) Furnish midstream natural gas industry participants with sufficient 
13 
information for efficient access to the interconnected natural gas 
14 
transmission system; 
15 
(d) Procure ancillary services necessary to support the reliable and 
16 
continuous flow of natural gas through the interconnected natural gas 
17 
transmission system; 
18 
(e) Annually 
prepare 
a 
comprehensive 
Natural 
Gas 
Transmission 
19 
Development Plan based on the submitted Natural Gas Transmission 
20 
Development 
Plans 
of 
natural 
gas 
transmission 
utilities, 
upon 
21 
consultation with public and private stakeholders, and submit the same 
22 
for review and approval of the DOE; 
23 
(f) Collect an NGTSO fee, subject to the approval of the ERC; and  
24 
(g) Perform other functions and responsibilities determined by the DOE and 
25 
ERC pursuant to Sections 5 and 6 of this Act.  
26 
 
27 
CHAPTER VI 
28 
RATES, FEES, AND OTHER CHARGES 
29 
 
30 
SECTION 24. Publication and Unbundling of Fees. – LNG terminals with 
31 
regulated third party access, whether through an rTPA permit or a DOE 
32 
declaration of an unutilized capacity, natural gas transmission utilities, and the 
33 
NGTSO shall identify and segregate in their bills to midstream end-users the 
34 
components of their terminal fees, natural gas transmission fees, and NGTSO 
35 
fee, respectively, and publish the same on their website.   
36 
 
37 
SECTION 25. Other Fees and Charges. – The DOE, ERC, and other relevant 
38 
government agencies may impose reasonable fees for processing applications 
39 
and permits as may be necessary in this Act pursuant to Executive Order No. 
40 
292, otherwise known as the Administrative Code of 1987, and Republic Act No. 
41 
9136 otherwise known as the Electric Power Industry Reform Act of 2001. 
42 
 
43 
CHAPTER VII 
44 
PROHIBITED ACTS AND PENALTIES 
45 
 
46 
SECTION 26. Prohibited Acts.– Without prejudice to civil and criminal liability, 
47 
the following acts shall be prohibited:  
48 
(a) For government agencies: failing to comply with the responsibilities under 
49 
Chapter II of this Act, and within the timeframes specified in Sections 5, 
50 
6, and 36 of this Act;  
51 
(b) For midstream natural gas industry participants:  
52 
a. Engaging in activities without the required permits, licenses, 
53 
certificates, and authorizations under this Act, specifically: 
54 
i. Engaging in the aggregation, supply, importation, exportation, 
55 
receipt, 
unloading, 
loading, 
processing, 
storage, 
56 
regasification, transmission, bunkering, and transportation of 
57 


 
 
 
19
natural gas, or the location, construction, improvement, 
1 
operation, utilization, expansion, modification, rehabilitation, 
2 
repair, maintenance, decommissioning, and abandonment of 
3 
an LNG terminal, natural gas transmission system, dedicated 
4 
natural gas pipeline, virtual pipeline, and motor vehicles and 
5 
marine vessels transporting natural gas without a permit as 
6 
defined in this Act from DOE, ERC, or DOTR or its attached 
7 
agencies,  
8 
ii. Engaging in any activity as a midstream natural gas industry 
9 
participant without a license, certificate, and authorization 
10 
from DENR, DOH, Department of Interior and Local 
11 
Government or its attached agencies, local government units, 
12 
and other relevant government agencies,   
13 
iii. Operating as an own use terminal without an own use permit, 
14 
iv. Operating as an rTPA terminal without an rTPA permit, and 
15 
v. Operating a natural gas transmission system without a 
16 
legislative franchise and a CPCN; 
17 
b. Failure to comply with health, safety, security, and environmental 
18 
standards, requirements, and guidelines as well as codes under this 
19 
Act, whichever is applicable, specifically:  
20 
i. Failure to comply with the PNS or other international 
21 
standards adopted as PNS of the following: 
22 
1. Natural gas, in its original or liquefied form, 
23 
2. Location, 
construction, 
improvement, 
operation, 
24 
utilization, expansion, modification, rehabilitation, 
25 
repair, 
maintenance, 
decommissioning, 
and 
26 
abandonment of all LNG terminals,  
27 
3. Storage and bunkering of natural gas and its respective 
28 
facilities,  
29 
4. Virtual pipelines,  
30 
5. Motor vehicles and marine vessels transporting natural 
31 
gas,  
32 
6. Dedicated natural gas pipelines, and  
33 
7. Natural gas transmission systems 
34 
ii. Failure to comply with standards, rules, and regulations in 
35 
the conduct of health risk assessment studies in cases of 
36 
natural gas accidents,  
37 
iii. Failure to comply with the Natural Gas Transmission Code, 
38 
iv. Failure to comply with the LNG Terminal Regulated Third 
39 
Party Access Code, and 
40 
v. Failure to comply with the Transmission Regulated Third 
41 
Party Access Code, 
42 
vi. Failure to comply with the safety and exclusion zone; 
43 
c. Failure to submit or disclose required data, information, and 
44 
documents, whichever is applicable, specifically: 
45 
i. Failure to submit an LNG Terminal Development Plan, 
46 
ii. Failure to submit a Natural Gas Transmission Development 
47 
Plan, 
48 
iii. Refusal or failure to submit the required data and information 
49 
to the DOE pursuant to Section 5 of this Act, 
50 
iv. Refusal or failure to submit the required documents, data, 
51 
and information to the ERC pursuant to Section 6 of this Act, 
52 
v. Refusal or failure to submit health data and information to 
53 
the DOH pursuant to Section 8 of this Act,  
54 
vi. Refusal or failure to publicly disclose the following:  
55 
1. Capacity available to third parties, 
56 
2. Utilization of capacities by third parties,  
57 


 
 
 
20
vii. Failure 
to 
furnish 
midstream 
natural 
gas 
industry 
1 
participants with sufficient information for efficient access to 
2 
the interconnected natural gas transmission system, and 
3 
viii. Failure to inform the ERC of its intent to convert a dedicated 
4 
natural gas pipeline to a natural gas transmission system 
5 
simultaneous with its application for a legislative franchise; 
6 
d.  Failure to comply with the requirements on fees, whichever is 
7 
applicable, specifically: 
8 
i. Failure to comply with the publication and unbundling 
9 
requirement for the terminal fee, natural gas transmission fee, 
10 
and NGTSO fee, whichever is applicable,  
11 
ii. Collecting an NGTSO fee without the approval of ERC,  
12 
iii. Awarding a winning bid beyond the reserve price determined 
13 
by ERC,   
14 
iv. Collecting a natural gas transmission fee higher than the 
15 
winning bid, and 
16 
v. Disclosing the reserve price before the determined time by 
17 
ERC; 
18 
e. Failure to comply with the requirements on own use and regulated 
19 
third party access, whichever is applicable, specifically: 
20 
i. Allowing a third party to use a portion or the entire capacity 
21 
of a dedicated natural gas pipeline,  
22 
ii. Entering into an nTPA or similar arrangement with third 
23 
parties or granting use and access to third parties to the 
24 
extent of the capacity covered by an own use permit for LNG 
25 
terminals,  
26 
iii. Refusal or failure to conduct a transparent, fair, reasonable, 
27 
and non-discriminatory competitive selection of third parties 
28 
for the capacity covered by an rTPA permit for LNG terminals, 
29 
or the entire capacity of a natural gas transmission system,  
30 
iv. Using or allowing an affiliate to use the capacity covered by an 
31 
rTPA permit for LNG terminals or a portion or the entire 
32 
capacity of a natural gas transmission system without 
33 
undergoing a competitive selection process, 
34 
v. Giving any undue preference or advantage to any third party, 
35 
whether in rates, terms, conditions, or special privileges,  
36 
vi. Failure to provide transparent, fair, reasonable, and non-
37 
discriminatory use and access to third parties, 
38 
vii. Failure to comply with mandated regulated third party access 
39 
for unutilized capacity; 
40 
f.  Failure to comply with other responsibilities as midstream natural 
41 
gas industry participants, whichever is applicable, specifically:  
42 
i. Refusal to participate as an identified member of the technical 
43 
working group,  
44 
ii. Failure to cooperate in any investigation conducted by DOE, 
45 
ERC, or PCC pursuant to their powers under this Act,  
46 
iii. Failure to comply with the prior approval requirement of any 
47 
sale, assignment, or transfer of control of a midstream natural 
48 
gas industry participant with a DOE issued permit to another 
49 
entity;  
50 
iv. Failure to comply with the directive of DOE for prior disclosure 
51 
of any sale, assignment, or transfer of ownership or direct or 
52 
indirect interests, rights, or participation of a midstream 
53 
natural gas industry participant with a DOE issued permit to 
54 
another entity; 
55 
v. Engaging in anti-competitive behavior, 
56 


 
 
 
21
vi. Refusal or failure to assign to the NGTSO the operation and 
1 
maintenance of its natural gas transmission system upon 
2 
directive of the ERC, 
3 
vii. Refusal or failure to inform and coordinate with the NGTSO or 
4 
the natural gas transmission utilities, whichever is applicable, 
5 
for the location, construction, improvement, operation, 
6 
utilization, expansion, modification, rehabilitation, repair, 
7 
maintenance, decommissioning, and abandonment of any 
8 
part of the natural gas transmission system,  
9 
viii. Failure to secure ancillary services necessary to support the 
10 
reliable and secure flow of natural gas through the 
11 
interconnected natural gas transmission system, and 
12 
ix. Failure to comply with other responsibilities not otherwise 
13 
stated in this Section.  
14 
 
15 
SECTION 27. Penalties. – Without prejudice to civil and criminal liability, the 
16 
following administrative penalties shall be imposed upon any natural or juridical 
17 
person for every prohibited act enumerated below:  
18 
(a) Section 26 (a): Fine not exceeding the equivalent of six (6) months’ salary 
19 
or suspension not exceeding one (1) year, or removal depending on the 
20 
gravity of the offense;  
21 
(b) Section 26 (b): 
22 
a. First Offense: Fine of not less than Five hundred thousand pesos 
23 
(P500,000) for every day of non-compliance, and if applicable, 
24 
suspension of permits, licenses, certificates, or authorizations until 
25 
the violation is corrected,  
26 
b. Second Offense: Fine of not less than One million pesos (P1,000,000) 
27 
for every day of non-compliance, and if applicable, suspension of 
28 
permits, licenses, certificates, or authorizations until the violation is 
29 
corrected, and  
30 
c. Third Offense: Fine of not less than Five million pesos (P5,000,000), 
31 
revocation of permits, licenses, certificates, or authorizations, and 
32 
disqualification from applying for future permits, licenses, 
33 
certificates, or authorizations. In the case of natural gas 
34 
transmission utilities, DOE and ERC shall recommend the 
35 
revocation of their respective franchises to Congress. In the case of 
36 
the NGTSO, it shall be replaced. 
37 
Provided, That the administrative penalty for Section 26(b)(f)(v) shall be 
38 
pursuant to Section 29 of the Philippine Competition Act.  
39 
 
40 
CHAPTER VIII 
41 
FINAL PROVISIONS 
42 
 
43 
SECTION 28. Incentives. – LNG terminals, storage facilities, bunkering 
44 
facilities, dedicated own use natural gas pipelines, and natural gas transmission 
45 
systems, shall be included in the Strategic Investment Priority Plan subject to 
46 
an evaluation process and shall be entitled to the incentives and for the length 
47 
of time provided under Executive Order No. 226, otherwise known as the 
48 
Omnibus Investments Code of 1987, as amended by Republic Act No. 11534, 
49 
otherwise known as the Corporate Recovery and Tax Incentives for Enterprises 
50 
Act, and other applicable laws. 
51 
 
52 
SECTION 29. Permits and Licenses. – All permits, licenses, certificates, and 
53 
authorizations issued pursuant to this Act shall be streamlined and shall be 
54 
covered by Republic Act No. 11234, otherwise known as the Energy Virtual One-
55 
Stop Shop Act, except for those whose time frames are expressly provided herein. 
56 
 
57 


 
 
 
22
SECTION 30. Public Access to Information. – The DOE, ERC, and other 
1 
relevant government agencies shall allow public access, through its website, to 
2 
all data and information submitted in the implementation of this Act: Provided, 
3 
That such access is compliant with Section 31 hereto. 
4 
 
5 
SECTION 31. Treatment of Confidential Information. – The DOE, ERC, and 
6 
other relevant government agencies shall not disclose any proprietary and 
7 
confidential information to the public and to other midstream natural gas 
8 
industry participants unless prior consent of the source or owner of such 
9 
information has been obtained by the requesting party: Provided, That prior 
10 
consent shall not be required if the proprietary and confidential information is 
11 
requested by a government agency and the request is made in performance of its 
12 
functions: Provided further, That the requesting government agency shall not 
13 
disclose the proprietary and confidential information to the public and to other 
14 
midstream natural gas industry participants.  
15 
 
16 
SECTION 32. Establishment of Dedicated Offices. – The DOE and the ERC 
17 
shall establish dedicated bureaus or offices for the effective implementation of 
18 
this Act.  The organizational structure and staffing complement shall be 
19 
determined by the DOE Secretary and ERC Chairperson respectively, with 
20 
approval of the Department of Budget and Management or the Office of the 
21 
President, whichever is applicable, and in accordance with existing civil service 
22 
rules and regulations.  
23 
 
24 
SECTION 33. Appropriations. – The amount of Seventy-five million pesos 
25 
(P75,000,000.00) shall be charged against the current year’s appropriations of 
26 
the DOE and the amount of Seventy million pesos (P70,000,000.00) shall be 
27 
charged against the current year’s appropriations of the ERC, all for the initial 
28 
implementation of this Act.  Thereafter, such amounts necessary for the 
29 
sustainable implementation of this Act shall be included in the annual General 
30 
Appropriations Act.  
31 
 
32 
SECTION 34.  Congressional Oversight. – The Joint Congressional Energy 
33 
Commission (JCEC) shall exercise oversight powers over the implementation of 
34 
this Act. The DOE, ERC, and other relevant government agencies shall submit 
35 
annual reports to the JCEC not later than the fifteenth day of September, which 
36 
shall include the latest relevant data, implementation review and reports, and 
37 
policy and regulatory issuances. 
38 
 
39 
SECTION 35. Transitory Period. – All midstream natural gas industry 
40 
participants shall comply with the provisions of this Act within five (5) years from 
41 
its 
effectivity: 
Provided, 
That 
health, 
safety, 
security, 
environmental, 
42 
construction, operation and other permits, licenses, certificates, and 
43 
authorizations issued prior to the effectivity of this which are not inconsistent 
44 
herewith shall remain valid. 
45 
 
46 
Natural gas transmission systems existing at the time of the effectivity of this Act 
47 
shall be allowed to continue pursuant to the terms and conditions indicated in 
48 
their franchise and until the lapse of the period accorded to them in the 
49 
franchise. 
50 
 
51 
SECTION 36.  Implementing Rules and Regulations. – The DOE and ERC, in 
52 
consultation with the relevant government agencies, and public and private 
53 
stakeholders, shall issue the implementing rules and regulations (IRR) of this 
54 
Act within six (6) months from its promulgation.  
55 
 
56 


 
 
 
23
SECTION 37.  Separability Clause. – Any provision of this Act, which may be 
1 
declared unconstitutional or invalid shall not have the effect of nullifying other 
2 
portions or provisions hereof. 
3 
 
4 
SECTION 38.  Amendatory and Repealing Clause. – The specific provisions of 
5 
Republic Act No. 387, otherwise known as the Petroleum Act of 1949, and 
6 
Presidential Decree No. 334, Creating the Philippine National Oil Company, 
7 
Defining its Powers and Functions, Providing Funds Therefor, and For Other 
8 
Purposes, that are inconsistent with this Act are hereby amended or repealed 
9 
accordingly. 
10 
 
11 
All other laws, ordinances, rules, regulations and issuance or parts thereof, that 
12 
are inconsistent with this Act, are likewise amended or repealed accordingly. 
13 
 
14 
SECTION 39. Effectivity Clause. – This Act shall take effect fifteen (15) days 
15 
after its publication in the Official Gazette or one (1) newspaper of general 
16 
circulation. 
17 
 
18 
Approved, 
19 
 
20