EIGHTEENTH CONGRESS OF THE 
REPUBUC OF THE PHILIPPINES 
Second Regular Session
SENATE
■ ’<Dtutr at tli'.* ■ ■•f.tvp
■21 HAY 17 P2:18
s.B. No. 2203 Ri:c£i a
In substitution of Senate Bill 1819
Prepared by the Committee on Energy joint with the Committee on Finance with
Senator Gatchaiian as author thereof
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:
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CHAPTER I
GENERAL PROVISIONS
SECTION 1. Short Title. - This Act shall be referred to as the "Midstream Natural 
Gas Industry Development Act."
SECTION 2. Declaration of Policy. - It is hereby declared the policy of the State 
to:
(a) 
Ensure the country's energy security by developing diversification of sources 
of primary energy supply to various sectors of the economy;
(b) Promote the role of natural gas as an additional energy source and 
complementary fuel to variable renewable energy by creating a legal and


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regulatory framework that would govern the promotion and development of 
the natural gas industry in the country;
(c) 
Create a regulatory environment that will foster a competitive market for 
natural gas;
(d) Encourage the inflow of private capital in the development of the midstream 
natural gas industry;
(e) Ensure a safe, secure, reliable, and environmentally responsible operation of 
the midstream natural gas value chain to Include personnel and user 
protection, through the formulation and adoption of local or International 
standards on health, safety, security and the environment; and
(f) 
Protect midstream end users by mandating transparent and fair rates, fees, 
and charges.
SECTION 3. Scope and Application. - This Act shall apply to the midstream natural 
gas industry specifically the aggregation, supply, importation, exportation, receipt, 
unloading, loading, processing, storage, regasification, transmission, bunkering, and 
transportation of natural gas. In its original or liquefied form, from local or foreign 
sources, and the systems and facilities utilized for such. It shall also apply to the 
location, construction, improvement, operation, utilization, expansion, modification, 
rehabilitation, repair, maintenance, decommissioning, and abandonment of such 
systems and facilities.
SECTION 4. Definition of Terms. - For purposes of this Act, the following terms 
shall be defined as stated below:
(a) Affiliate refers to any natural or juridical person who, singly or jointly with 
other natural or juridical persons, directly or indirectly, through one or more 
intermediaries, controls. Is controlled by, or is under common control with 
another natural or juridical person. It includes a subsidiary company, a parent 
company, and the subsidiaries, directly or indirectly, of a common parent;
(b) Ancillary reserve refers to the natural gas procured by the natural gas 
transmission utility or the NGTSO, whichever is applicable, necessary in the 
operation of the natural gas transmission system to regulate fluctuations in


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its operating pressure and maintain system stabiiity, safety, and efficiency to
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ensure the continuous transmission of naturai gas to midstream end-users in
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accordance with the Naturai Gas Transmission Code. It shaii be included in
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the natural gas transmission fee or the NGTSO fee, whichever is applicable;
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(c) Anticompetitive behavior refers to any act enumerated under Section 14 and
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Section 15 of Republic Act No. 10667, otherwise known as the Philippine
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Competition Act;
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(d) LNG Bunkering refers to the selling of natural gas for use of domestic or
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foreign marine vessels;
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(e) LNG Bunkering Facilities refers to all infrastructure built and designed for LNG
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bunkering;
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(f) 
Capacity refers to the handling design of a system used in the context of its
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functionality, expressed In a specific measurement such as volume In cubic
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meters or flow rate in normal cubic meters.per time unit;
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(g) Control refers to the power to determine the financial and operating policies
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of an entity to benefit from its activities. It is presumed to exist when the
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parent entity owns, directly or through subsidiaries or associates, more than
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fifty percent (50%) of the voting power of an entity. It also exists when the
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parent entity owns fifty percent (50%) or less of the voting power of an entity,
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but has any of the following powers:
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(1) Power over more than fifty percent (50%) of the voting rights by virtue
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of an agreement with other investors,
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(2) Power to govern the financial and operating policies of the entity under
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a statute or agreement,
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(3) Power to appoint or remove the majority of the members of the board
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of directors or equivalent governing body, or
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(4) Power to cast the majority of votes at meetings of the board of directors
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or equivalent governing body;
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(h) Dedicated natural gas pipeline refers to a pipeline exclusively utilized by a
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midstream natural gas industry participant or its affiliate for the conveyance
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of natural gas from an LNG terminal or a local natural gas production facility
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to the said midstream natural gas Industry participant or its affiliate;


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(i) 
Emergency reserve refers to the amount of natural gas, In Its original or 
liquefied form, which may be contracted by midstream end users based on 
public Interest, sufficient to ensure a continuous, adequate, and stable supply 
of natural gas for a period in the event of a supply disruption. The period 
shall be determined In this Act's implementing rules and regulations;
(j) 
Importation refers to the bringing of natural gas. In its original or liquefied 
form, into the Philippines from foreign sources;
(k) 
Gas aggregation refers to the activity of pooling together various demands 
for natural gas from midstream end users and supplying them with natural 
gas from one or more sources;
(l) 
Gas aggregator refers to any natural or juridical person who engages in gas 
aggregation;
(m) Liquefied naturaigas (LNG) refers to natural gas which has been cooled to a 
cryogenic temperature, converting It to a liquid state;
(n) LNG terminairefers to all facilities located onshore or offshore, that are used 
to import, receive, unload, load, process, store, and regasify natural gas. In 
Its original or liquefied form, from local or foreign sources. It shall Include 
berthing ports, unloading and loading arms, line packs, cryogenic pipelines, 
regasification facilities, and storage tanks, among others;
(o) LNG Terminal Development Plan refers to a comprehensive plan prepared by 
each LNG terminal owner and operator relating to the location, construction, 
improvement, operation, utilization, expansion, modification, rehabilitation, 
repair, maintenance, decommissioning, and abandonment of each of its LNG 
terminals and all its required facilities and equipment, taking Into 
consideration, among others, existing and projected demand and supply of 
natural gas;
(p) LNG Terminal Regulated Third Party Access Code refers to the compendium 
of responsibilities, qualifications, standards, and rules promulgated by the 
Department of Energy (DOE) for regulated third party access by one or more 
third parties to a portion, the entire, or the unutilized capacity of an rTPA LNG 
terminal permit holder, and the evaluation of performance of an LNG terminal 
with respect thereto;


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(q) Midstream end user refers to any natural or juridical person, requiring the 
supply of natural gas, in its original or liquefied form, for resale or own use 
but excluding the retail use of natural gas. It Includes power generation 
plants, industrial and commercial establishments, ecozones, storage facilities, 
bunkering facilities, virtual pipelines, and motor vehicles and marine vessels 
transporting natural gas;
(r) 
Midstream natural gas industry refers to the aggregation, supply, importation, 
exportation, receipt, unloading, loading, processing, storage, regasification, 
transmission, bunkering, and transportation of natural gas. In Its original or 
liquefied form, but shall exclude the retail of natural gas. It utilizes, among 
others, LNG terminals, dedicated natural gas pipelines, natural gas 
transmission systems, storage facilities, bunkering facilities, virtual pipelines, 
and motor vehicles and marine vessels transporting natural gas;
(s) 
Midstream Natural Gas Industry Development Plan refers to the 
comprehensive plan for ensuring safe, secure, and reliable supply of natural 
gas, in its original or liquefied form, while establishing the efficient operations 
of the country's midstream natural gas infrastructure and managing demand 
for natural gas through specific government programs and policies. It shall 
include the various LNG Terminal Development Plans and Natural Gas 
Transmission Development Plans, and studies on over-all supply and demand, 
capacity, and other research necessary in achieving a sound demand and 
supply projection for natural gas in the country;
(t) 
Midstream natural gas industry participants refer to the supplier or importer 
of natural gas; gas aggregator; owner and operator of LNG terminal, 
dedicated natural gas pipeline, natural gas transmission system, storage and 
bunkering facilities, virtual pipelines, and motor vehicles and marine vessels 
utilized to transport natural gas; the Natural Gas Transmission System 
Operator; third parties; and midstream end users;
(u) Natural gas refers to gas obtained from boreholes and wells consisting 
primarily of a mixture of methane, ethane, propane, and butane with small 
amounts of heavier hydrocarbons and some impurities, notably nitrogen and


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complex sulfur compounds and water, carbon dioxide, and hydrogen sulfide 
as well as non-conventional gas including gas from bituminous shale;
(v) Natural Gas Transmission Code refers to the compendium of rules, 
procedures, requirements, regulations, and minimum technical performance 
standards governing the safe and reliable location, construction, 
improvement, operation, utilization, expansion, modification, rehabilitation, 
repair, maintenance, decommissioning, and abandonment of ail dedicated 
natural gas pipelines and natural gas transmission systems in the country. It 
also defines and establishes the relationship of dedicated natural gas pipelines 
and natural gas transmission systems with facilities and installations of other 
midstream natural gas industry participants, if applicable;
(w) Natural Gas Transmission Development Plan refers to the plan of each 
dedicated own use pipeline owner and operator, natural gas transmission 
utility, or the Natural Gas Transmission System Operator when applicable, for 
managing dedicated own use pipelines, natural gas transmission systems or 
the interconnected natural gas transmission system, whichever is applicable, 
through efficient planning for its location, construction, improvement, 
operation, utilization, expansion, modification, rehabilitation, repair, 
maintenance, decommissioning, and abandonment;
(x) Natural gas transmission system refers to a network containing pipelines and 
other related facilities, owned and operated by a natural gas transmission 
utility, which convey natural gas. In its original or liquefied form, from an LNG 
terminal or a local natural gas production facility to a midstream natural gas 
industry participant;
(y) Natural gas transmission fee refers to the amount paid by midstream natural 
gas industry participants for the use of a natural gas transmission system. It 
shall consist of amounts used to defray the costs of location, construction, 
improvement, operation, utilization, expansion, modification, rehabilitation, 
repair, maintenance, decommissioning, and abandonment of the system, and 
provide a reasonabie rate of return. It also Includes the cost of operating the 
system while there Is no Natural Gas Transmission System Operator;


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(z) Natural Gas Transmission System Operator (NGTSO) refers to a natural or 
juridical person responsible for operating and maintaining the interconnected 
natural gas transmission system, ensuring the continuous and reliable delivery 
of natural gas to midstream natural gas industry participants, and securing 
the long-term ability of the system to meet demand for the transmission of 
natural gas;
(aa) Natural gas transmission utility ret&cs to a natural or juridical person who has 
a franchise granted by law to construct, own, and operate a natural gas 
transmission system within a specified area;
(bb) Negotiated third party access (nTPA) refers to a contractual arrangement 
between the owner and operator of a dedicated natural gas pipeline or an 
own use LNG terminal permit holder and a third party to allow the use and 
access to such third party of a specific capacity of a dedicated natural gas 
pipeline or an LNG terminal with an own use permit for a fee agreed upon 
between the two entities. It does not include contractual arrangements 
entered into by an own use LNG terminal permit holder and a third party 
pursuant to a declaration of unutilized capacity by the DOE in accordance with 
the LNG Terminal Regulated Third Party Access Code;
(cc) NGTSO fee refers to the amount paid by midstream natural gas industry 
participants to the NGTSO for its services in operating and maintaining the 
interconnected natural gas transmission system;
(dd) Own use LNG terminal permit holder refers to an LNG terminal whose owner 
and operator has been issued an own use permit;
(ee) Own use permit refers to an authorization Issued by DOE to the owner and 
operator of an LNG terminal to exclusively use or allow its affiliate to use a 
specific capacity of the LNG terminal for a specified period of time, subject to 
LNG Terminal Regulated Third Party Access Code;
(ff) Permit refers to an authorization issued by the DOE, the Energy Regulatory 
Commission (ERC), or the Department of Transportation (DOTr) or Its 
attached agencies, whichever is applicable, for the aggregation, supply, 
importation, exportation, receipt, unloading, loading, processing, storage, 
regasification, and bunkering of natural gas, or the location, construction.


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Improvement, operation, utilization, expansion, modification, rehabilitation, 
repair, maintenance, decommissioning, and abandonment of an LNG 
terminal, natural gas transmission system, dedicated natural gas pipeline, 
storage facilities, bunkering facilities, virtual pipelines, and motor vehicles and 
marines vessels transporting natural gas for a specified period of time;
(99) Permit holder refers to a natural or juridical person who is granted a permit 
by the DOE, ERC, or DOTr or its attached agencies whichever is applicable, 
to engage in the aggregation, supply. Importation, exportation, receipt, 
unloading, loading, processing, storage, regasification, and bunkering of 
natural gas, or the location, construction, improvement, operation, utilization, 
expansion, modification, rehabilitation, repair, maintenance, 
decommissioning, and abandonment of an LNG terminal, natural gas 
transmission system, dedicated natural gas pipeline, storage facilities, 
bunkering facilities, virtual pipelines, and motor vehicles and marine vessels 
transporting natural gas for a specified period of time;
(hh) Philippine National Standard (PNS) refers to the standards promulgated by 
the Department of Trade and Industry (DTI) - Bureau of Philippine Standards 
(BPS) pertaining to product specifications, test methods, terminologies, 
procedures, or practices pursuant to Republic Act No. 4109, otherwise known 
as the Standards Act, and other applicable laws, rules and regulations;
(ii) Regulated third party access refers to a contractual arrangement between the 
following:
(1) An rTPA LNG terminal permit holder or a natural gas transmission utility 
and a third party to allow the latter transparent, fair, reasonable, and 
non-dlscriminatory use and access of the capacity available to third 
parties of the LNG terminal or the natural gas transmission system,
(2) An own use LNG terminal permit holder and a third party pursuant to a 
declaration of unutilized capacity by the DOE In accordance with the LNG 
Terminal Regulated Third Party Access Code, or
(3) A natural gas transmission utility and a third party pursuant to a 
declaration of unutilized capacity by the DOE in accordance with the 
Transmission Regulated Third Party Access Code;


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(jj) Regulated third party access (rTPA) permit refers to an authorization issued by 
the DOE to the owner and operator of an LNG terminal to offer to third parties, 
the fair, reasonable, and non-discriminatory use and access of a specific 
capacity of its LNG terminal for a specified period of time, subject to the LNG 
Terminal Regulated Third Party Access Code;
(kk) Reserve price refers to the undisclosed rate determined by ERC using a 
methodology pursuant to Section 6 of this Act that serves as the price ceiling 
for the natural gas transmission fee;
(II) Retail refers to the sale of natural gas to the general public in relatively small 
quantities for consumption such as the sale of natural gas to motor vehicles 
and to households;
(mm) 
rTPA LNG terminal permit holder refers to an LNG terminal whose owner
or operator has been issued an rTPA permit;
(nn) Storage refers to the stocking of natural gas for the purpose of regasification, 
bunkering, reserve, any combination thereof, or any other purpose consistent 
with this Act;
(oo) Storage facilities refer to any equipment or infrastructure used for storage;
(pp) Supplier refers to a natural or juridical person authorized by the DOE to 
engage in supply as defined in this Act;
(qq) Supply refers to the trade of indigenous or imported natural gas, in its original 
or liquefied form, and Its subsequent sale or transfer to midstream natural 
gas industry participants;
(rr) Terminal fee refers to the rates, charges, and other similar considerations 
imposed upon third parties for the use and services of any of the following:
(1) The capacity or a portion thereof covered by an rTPA permit of an LNG 
terminal, or
(2) The unutilized capacity or a portion thereof covered by an own use 
permit of an LNG terminal;
(ss) Third party refers to a midstream natural gas industry participant who is not 
the owner, operator, or affiliate of the owner and operator of an LNG terminal, 
dedicated natural gas pipeline, or natural gas transmission system;


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(tt) Transmission refers to the conveyance of natural gas either through a 
dedicated natural gas pipeline or a natural gas transmission system;
(uu) Transmission Reguiated Third Party Access Code refers to the compendium 
of responsibilities, qualifications, standards, and rules promulgated by the 
ERC for regulated third party access by one or more third parties to a portion, 
the entire, or the unutilized capacity of a natural gas transmission system, 
and the evaluation of performance of a natural gas transmission utility with 
respect thereto;
(w) Unutiiized capacity refers to a portion of the capacity of an LNG terminal, with 
an own use permit, an rTPA permit or both, or a natural gas transmission 
system, set apart for the use of the LNG terminal owner and operator or a 
third party with regulated third party access to the LNG terminal or the natural 
gas transmission system, which remains unused after a reasonable period of 
time and declared as such by the DOE or the ERC pursuant to Sections 5 and 
6 of this Act and the LNG Terminal Regulated Third Party Access Code and 
the Transmission Regulated Third Party Access Code, whichever is applicable; 
and
(ww) Virtuaipipeiines refer to alternative methods of transporting natural gas using 
modules coupled to mobile platforms such as motor vehicles, marine vessels, 
or rail platforms.
CHAPTER II
POWERS AND RESPONSIBILITIES OF GOVERNMENT AGENCIES
SECTION 5. Powers and Responsibilities of the Department of Energy 
(DOE). - In addition to its functions under Republic Act No. 7638, otherwise known 
as the Department of Energy Act of 1992, the DOE shall be the lead implementing 
agency for this Act. Towards this end, it shall:
(a) Supervise and monitor the development of the midstream natural gas 
industry, and ensure the security and sufficiency of the supply of natural gas 
for local demand;
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(b) Require the annual submission of, review, and approve LNG Terminal 
Development Plans and Natural Gas Transmission Development Plans: 
Provided, That the specific guidelines and timeline for the approval of these 
plans shall be determined In this Act's implementing rules and regulations 
taking into consideration the policy declarations of this Act and upon 
consultation with other relevant government agencies, midstream natural gas 
Industry participants, and other public and private stakeholders;
(c) 
Prepare a Midstream Natural Gas Industry Development Plan based on the 
various LNG Terminal Development Plans and Natural Gas Transmission 
Development Plans within two (2) years from the effectivity of this Act's 
implementing rules and regulations, upon consultation with other relevant 
government agencies, midstream natural gas industry participants, and other 
public and private stakeholders. The Midstream Natural Gas Industry 
Development Plan shall be reviewed and updated annually, and integrated 
into the Philippine Energy Plan;
(d) Promulgate the PNS or Identify and adopt other international standards 
adopted as PNS by the DTI-BPS, together with relevant government agencies 
and upon consultation with midstream natural gas industry participants and 
other public and private stakeholders, within eighteen (18) months from the 
effectivity of this Act's implementing rules and regulations, for the following: 
(I) Natural gas, in its original or liquefied form.
Location, construction, improvement, operation, utilization, expansion, 
modification, rehabilitation, repair, maintenance, decommissioning, and 
abandonment of all LNG terminals.
Storage and bunkering of natural gas and its respective facilities.
Virtual pipelines, and
Motor vehicles and marine vessels transporting natural gas;
(e) Ensure compliance with the health, safety, security, and environmental 
standards of the following, together with the Department of Environment and 
Natural Resources (DENR), Department of Health (DOH), and other relevant 
government agencies:
(I) Natural gas, in its original or liquefied form.
(ii)
(ill)
(iv)
(V)
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(ii) Location, construction, improvement, operation, utiiization, expansion, 
modification, rehabilitation, repair, maintenance, decommissioning, and 
abandonment of all LNG terminals, and 
(ill) Storage and bunkering of natural gas and its respective facilities;
(f) 
Convene and co-chair with DTI-BPS, within two (2) months from the 
effectivity of this Act, a technical working group comprised of relevant 
government agencies to include the ERC, DTI, DOTr, DENR, DOH, 
Department of Labor and Employment (DOLE), Department of Interior and 
Local Government (DILG), their respective attached agencies, midstream 
natural gas industry participants, and other relevant public and private 
stakeholders to ensure consistent and streamlined standards and regulations 
In the midstream natural gas Industry. The members of the technical working 
group shall fully cooperate and collaborate in the creation, promulgation, and 
streamlining of standards and regulations;
(g) Promulgate the guidelines for the establishment of safety and exclusion zones 
of LNG terminals, and determine such safety and exclusion zone for every 
LNG terminal, in consultation with the technical working group, relevant 
government agencies, local government units, and public and private 
stakeholders;
(h) Evaluate and act on applications for the location, construction, improvement, 
operation, utilization, expansion, modification, rehabilitation, repair, 
maintenance, decommissioning, and abandonment of all LNG terminals as 
well as storage facilities and bunkering facilities;
(i) 
Issue the following:
(i) Permits for the aggregation, supply, importation, exportation, receipt, 
unloading, loading, processing, storage, regasification, and bunkering of 
natural gas, in Its original or liquefied form in accordance with this 
Section, and
(Ii) Own use and rTPA permits to owners and operators of LNG terminals;
0) Establish a methodology and timeframe for the determination of the unutilized 
capacity of LNG terminals, which shall be integrated in the LNG Terminal 
Regulated Third Party Access Code, taking into consideration the following:
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(i) Reasonable period to use the capacity,
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(ii) 
Existing market demand, and
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(ili) 
Existing contracts;
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(k) Promulgate the LNG Terminal Regulated Third Party Access Code, within one
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(1) year from the effectivity of this Act's Implementing rules and regulations,
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and upon consultation with other relevant government agencies, midstream
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naturai gas industry participants, and other public and private stakeholders,
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and ensure compliance therewith. The LNG Terminal Regulated Third Party
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Access Code shall be reviewed and updated regularly. The following
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principles shall govern the creation of this code:
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(i) 
Reliable and continuous supply of natural gas, and
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(ii) 
Transparent, fair, reasonable, and non-discriminatory use and access;
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(I) Declare the unutilized capacity of an LNG terminal and mandate regulated
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third party access for such in accordance with the LNG Terminal Regulated
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Third Party Access Code;
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(m) Determine minimum guidelines to ensure the transparent, fair, reasonable,
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and non-discriminatory conduct of competitive selection processes by owners
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and operators of LNG terminal; Provided, That these minimum guidelines shall
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not Include the mode of competitive selection process;
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(n) Approve or disapprove any sale, assignment, or transfer of control to another
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entity by a midstream natural gas industry participant with a DOE issued
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permit within ninety (90) calendar days from submission of complete
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documentary requirements. Concomitantly, the DOE may require from any
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midstream natural gas industry participant with a DOE issued permit the prior
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disclosure of any sale, assignment, or transfer of ownership or direct or
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Indirect interests, rights, or participation not amounting to control to another
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entity. In both these cases, the DOE may review, modify, cancel, approve,
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or disapprove any permit it has issued taking into consideration the legal,
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technical, and financial qualifications of the purchaser, assignee, or transferee
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and its compliance with Its own use or rTPA permit or other DOE issued
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permits under this Act and existing laws, rules and regulations;
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(o) Determine the qualifications of and procedure for the competitive selection of
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a single independent NGTSO taking into consideration Section 22 of this Act,
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upon consultation with relevant government agencies, midstream natural gas
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industry participants, and other public and private stakeholders, and
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undertake its selection upon the Interconnection of natural gas transmission
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systems;
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(p) Require the submission of the following information from suppliers, importers,
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aggregators, and owners and operators of LNG terminals, storage facilities,
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and bunkering facilities, whichever is applicable, subject to Section 32 of this
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Act:
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(i) Progress and status reports on location, construction, improvement,
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operation, expansion, modification, rehabilitation, repair, maintenance,
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decommissioning, and abandonment of LNG terminals and storage and
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bunkering facilities,
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(ii) Regular reports on the following:
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i. Compliance with health, safety, security, and environmental
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standards,
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ii. Utilization of the LNG terminal by its owner and operator, the
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owner and operator's affiliates, and third parties, whichever is
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applicable,
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iii. Compliance with the LNG Terminal Regulated Third Party Access
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Code to include compliance with DOE directive to subject an
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unutilized capacity to regulated third party access;
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(iii) Supply and demand of natural gas with respect to their own facilities or
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operations,
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(iv) Volumes of specific inventories to include levels of importation and
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emergency reserve,
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(v) Progress and status reports on mitigation measures and responses In
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relation to accidents and other emergency Incidents,
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(vi) Mode of competitive selection of third parties for rTPA LNG terminal
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permit holders, reports on competitive selection processes undertaken,
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and status of utilization by third parties of the LNG terminal with an rTPA
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permit: Provided, That the mode for each competitive selection process 
shall be determined by each rTPA LNG terminal permit holder: Provided 
further. That each competitive selection process shall be transparent, 
fair, reasonable, and non-discriminatory, and 
(vli) Other data and information necessary to the performance of the duties 
and functions of DOE;
(q) Determine the necessity of and then direct the interconnection of natural gas 
transmission systems based on the Philippine Energy Plan, Midstream Natural 
Gas Development Plan, and the Natural Gas Transmission Development Plans, 
taking into consideration the maturity of the industry, the existing natural gas 
transmission systems' infrastructure, and the cost efficiency of 
Interconnection, and upon consultation with the ERC, other relevant 
government agencies, midstream natural gas industry participants, and other 
public and private stakeholders;
(r) 
Ensure compliance with the publication and unbundling of the terminal fee in 
accordance with Section 25 of this Act;
(s) 
Ensure and review compliance with, and investigate, motu proprio or upon 
complaint, any non-compliance with this Act including any permit DOE has 
Issued in relation hereto, its rules and regulations, the LNG Terminal 
Regulated Third Party Access Code, and any other issuance promulgated 
pursuant to the DOE's powers under this Act, except those under the 
jurisdiction of the ERC as provided under Section 6 herein. Thereafter, the 
DOE may penalize, suspend, or revoke, after due notice and hearing any 
permit it has issued;
(t) 
Endorse the findings of investigations against midstream natural gas industry 
participants, for any of the following:
(i) 
Anticompetitive behavior before the Philippine Competition Commission 
(PCC), or
(ii) 
Violations of the provisions of this Act and other applicable laws, rules, 
and regulations before the ERC, other quasi-judicial agencies, or the 
courts; and
15


1 
(u) Perform all other acts that are analogous to the aforementioned and In
2 
furtherance of the implementation of this Act.
3
4 
SECTION 6. Powers and Responsibilities of the Energy Regulatory
5 
Commission (ERC). - In addition to its functions under Republic Act No. 9136,
6 
otherwise known as the Electric Power Industry Reform Act of 2001, the ERC shall
7 
have the authority to:
8 
(a) Promulgate the PNS or identify and adopt other international standards adopted
9 
as PNS by the DTI-BPS, together with relevant government agencies and upon
10 
consultation with midstream natural gas industry participants and other public
11 
and private stakeholders, within eighteen (18) months from the effectivity of
12 
this Act's implementing rules and regulations, for the following:
13 
(i) Dedicated natural gas pipelines, and
14 
(ii) Natural gas transmission systems;
15 
(b) Ensure compliance with the health, safety, security, and environmental
16 
standards of the following, together with the Department of Environment and
17 
Natural Resources (DENR), Department of Health (DOH), and other relevant
18 
government agencies:
19 
(i) Dedicated natural gas pipelines, and
20 
(ii) Natural gas transmission systems;
21 
(c) Participate in the technical working group convened by DOE pursuant to Section
22 
5 of this Act;
23 
(d) Evaluate and act on applications for the location, construction, improvement,
24 
operation, utilization, expansion, modification, rehabilitation, repair,
25 
maintenance, decommissioning, and abandonment of dedicated natural gas
26 
pipelines and natural gas transmission systems;
27 
(e) Issue permits for the transmission of natural gas to include certificates of public
28 
convenience and necessity (CPCN) to natural gas transmission utilities;
29 
(f) Establish a methodology and timeframe for the determination of the unutilized
30 
capacity of natural gas transmission systems, which shall be integrated In the
31 
Transmission Regulated Third Party Access Code, taking into consideration the
32 
following:
16


1 
(i) Reasonable period to use the capacity,
2 
(II) 
Existing market demand, and
3 
(iii) 
Existing contracts;
4 
(g) Promulgate the Transmission Regulated Third Party Access Code, within one
5 
(l) year from the effectivity of this Act's implementing rules and regulations,
6 
and upon consultation with other relevant government agencies, midstream
7 
natural gas industry participants, and other public and private stakeholders,
8 
and ensure compliance therewith;
9 
(h) Promulgate the Natural Gas Transmission Code and Transmission Regulated
10 
Third Party Access Code, within one (1) year from the effectivity of this Act's
11 
implementing rules and regulations, and upon consultation with other relevant
12 
agencies, midstream natural gas industry participants, and other public and
13 
private stakeholders, and ensure compliance therewith. The Natural Gas
14 
Transmission Code and the Transmission Regulated Third Party Access Code
15 
which shall be reviewed and updated regularly. The following principles shall
16 
govern the creation of these codes:
17 
(i) 
Reliable and continuous supply of natural 
gas, and
18 
(ii) 
Transparent, fair, reasonable, and non-discriminatory use and access;
19 
(i) Declare the unutilized capacity of a natural gas transmission system and
20 
mandate regulated third party access for such in accordance with the
21 
Transmission Regulated Third Party Access Code;
22 
(j) Determine minimum guidelines to ensure the transparent, fair, reasonable, and
23 
non-discriminatory conduct of competitive selection processes by natural gas
24 
transmission utilities; Provided, That these minimum guidelines shall not
25 
include the mode of competitive selection process;
26 
(k) Approve or disapprove any plan of a natural gas transmission utility, an owner
27 
and operator of a dedicated natural gas pipeline, and the NGTSO to sell, assign,
28 
or transfer control to another entity. Concomitantly, the ERC may require from
29 
a natural gas transmission utility, an owner and operator of a dedicated natural
30 
gas pipeline, and the NGTSO the prior disclosure of any sale, assignment, or
31 
transfer of ownership or direct or indirect Interests, rights, or participation to
32 
another entity. In both these cases, the ERC may review, modify, cancel.
17


1 
approve, or disapprove any permit it has issued taking into consideration the
2 
iegal, technical, and financial qualifications of the purchaser, assignee, or
3 
transferee and its compliance with its ERC Issued permits under this Act and
4 
existing laws, rules and regulations;
5 
(I) Require the submission of the following information from the owner and
6 
operator of dedicated natural gas pipelines, the natural gas transmission utility,
7 
and the NGTSO, whichever is applicable, subject to Section 32 of this Act:
8 
(i) Progress and status reports on location, construction, improvement,
9 
operation, expansion, modification, rehabilitation, repair, maintenance,
10 
decommissioning, and abandonment of dedicated natural gas pipelines,
11 
natural gas transmission systems, and the Interconnected natural gas
12 
transmission system,
13 
(ii) Regular reports on the following:
14 
i. Compliance with health, safety, security, and environmental
15 
standards,
16 
ii. Utilization of the dedicated natural gas pipeline and natural gas
17 
transmission system by its owner and operator, the owner and
18 
operator's affiliates, and third parties, whichever Is applicable,
19 
iii. Compliance with the Transmission Regulated Third Party Access
20 
Code to Include compliance with DOE directive to subject an
21 
unutilized capacity to regulated third party access;
22 
(iii) Supply and demand of natural gas with respect to their own facilities or
23 
operations,
24 
(iv) Volumes of specific inventories to include levels of ancillary reserve,
25 
when applicable,
26 
(v) Compliance with health, safety, security, and environmental standards,
27 
and activities in relation thereto,
28 
(vi) Progress and status reports on mitigation measures and responses in
29 
relation to accidents and other significant or emergency incidents;
30 
(vii) Mode of competitive selection of third parties for natural gas
31 
transmission utilities, reports 
on competitive 
selection processes
32 
undertaken to include the natural gas transmission fee, and status of
18


1 
utilization by third parties: Provided, That the mode for each competitive
2 
selection process shall be determined by each natural gas transmission
3 
utility: Provided further, That each competitive selection process shall be
4 
transparent, fair, reasonable, and non-discriminatory,
5 
(viii) Billed and collected amounts of the natural gas transmission fee and
6 
NTSO fee, whichever is applicable, and
7 
(lx) Other documents, data, and Information necessary to the performance
8 
by ERC of its functions under this Act;
9 
(m) Ensure and review compliance with, and investigate, motuproprio, upon
10 
complaint, or upon endorsement of any government agency, any non-
11 
compliance with this Act including any permit ERC has issued in relation hereto,
12 
its rules and regulations, the Natural Gas Transmission Code, the Transmission
13 
Regulated Third Party Access Code, and any other Issuance promulgated
14 
pursuant to the ERC's powers under this Act, except those under the jurisdiction
15 
of the DOE as provided under Section 5 herein. Thereafter, the ERC may
16 
penalize, suspend, or revoke, after due notice and hearing any permit it has
17 
issued;
18 
(n) Endorse the findings of investigations on any anticompetitive behavior of an
19 
owner and operator of a dedicated natural gas pipeline, the natural gas
20 
transmission utility, and the NGTSO to the PCC;
21 
(o) Exercise its rate-setting power through the determination and regular review
22 
of the following:
23 
(1) Reserve price for the natural gas transmission fee. It shall remain
24 
undisclosed until the winning bidder is declared, and
25 
(ii) NGTSO fee.
26 
The ERC shall notify and afford relevant stakeholders the opportunity to be
27 
heard in the following:
28 
(i) Methodology for the determination of the reserve price, and
29 
(ii) Determination of the NGTSO fee;
30 
(p) Ensure compliance with the publication and unbundling of the natural gas
31 
transmission fee and the NGTSO fee imposed by the natural gas transmission
32 
utilities, and the NGTSO respectively, in accordance with Section 25 of this Act;
19


1 
(q) Review regularly the performance of natural gas transmission utilities and the
2 
NGTSO, when applicable, including the quality of Its service and compliance
3 
with its approved Natural Gas Transmission Development Plan and its powers
4 
and functions pursuant to Chapter V of this Act;
5 
(r) Exercise exclusive jurisdiction over all matters pertaining to rate setting in this
6 
Act taking into consideration the policy of full recovery of prudent and
7 
reasonable economic costs with a reasonable rate of return or such other
8 
principles that promote efficiency and other internationally accepted rate
9 
setting methodology;
10 
(s) Exercise overall regulatory supervision over dedicated natural gas pipelines,
11 
natural gas transmission systems, and the NGTSO; and
12 
(t) Perform all other acts that are analogous to the foregoing and in furtherance
13 
of the implementation of this Act.
14
15 
SECTION 7. Powers and Responsibilities of the Department of Environment
16 
and Natural Resources. - In addition to its functions under Executive Order No.
17 
192, otherwise known as the Reorganization Act of the Department of Environment
18 
and Natural Resources, and other applicable laws, the DENR, together with the DOE,
19 
the ERC, or the DOTr, shall ensure and monitor compliance with the environmental
20 
standards for the location, construction, improvement, operation, utilization,
21 
expansion, modification, rehabilitation, repair, maintenance, decommissioning, and
22 
abandonment of LNG terminals, natural gas transmission systems, dedicated natural
23 
gas pipelines, storage facilities, bunkering facilities, virtual pipelines, and motor
24 
vehicles and marine vessels transporting, storing or processing natural gas. In Its
25 
original state or liquefied form, and all related equipment and facilities.
26
27 
SECTION 8. Powers and Responsibilities of the Department of Health. - In
28 
addition to its functions under Executive Order No. 317, Series of 1941, entitled
29 
Organizing the Department of Health and Public Welfare, as amended, and Republic
30 
Act No. 11223, otherwise known as the Universal Health Care Act, the DOH, together
31 
with the DOE, the ERC or the DOTr, shall:
20


1 
(a) Ensure and monitor compliance with the health standards for the location,
2 
construction, improvement, operation, utilization, expansion, modification,
3 
rehabilitation, repair, maintenance, decommissioning, and abandonment of
4 
LNG terminals, natural gas transmission systems, dedicated natural gas
5 
pipelines, storage facilities, bunkering facilities, virtual pipelines, and motor
6 
vehicles and marine vessels transporting, storing, or processing natural gas, in
7 
its original state or liquefied form, and all related equipment and facilities;
8 
(b) Recommend standards, rules, and regulations in the conduct of health risk
9 
assessment studies in cases of natural gas accidents;
10 
(c) Develop guidelines, policies, and health standards on the treatment and
11 
management of patients affected by natural gas accidents; and
12 
(d) Require health data and Information from LNG terminals, natural gas
13 
transmission systems, dedicated natural gas pipelines, storage facilities, and
14 
bunkering facilities, virtual pipelines, and motor vehicles and marine vessels
15 
transporting, storing, or processing natural gas, in its original state or liquefied
16 
form, and all related equipment and facilities.
17
18 
SECTION 9. Powers and Responsibilities of the Department of Trade and
19 
Industry - Bureau of Philippine Standards. - In addition to its functions under
20 
Republic Act No. 4109, otherwise known as the Standards Act, the DTI-BPS, shall act
21 
as the Co-Chairperson of the technical working group created pursuant to Section 5
22 
of this Act, and together with the DOE, the ERC, or the DOTR, determine, develop,
23 
formulate, promulgate, and revise the Philippine National Standards, or Identify and
24 
adopt international standards as PNS, for natural gas, in its original or liquefied form,
25 
LNG terminals, dedicated natural gas pipelines, natural gas transmission systems,
26 
storage facilities, bunkering facilities, virtual pipelines, and motor vehicles and marine
27 
vessels transporting, storing, or processing natural gas, in its original state or liquefied
28 
form, and all related equipment and fecilities.
29
30 
SECTION 11. Powers and Responsibilities of the Department of
31 
Transportation and its Attached Agencies. - In addition to its functions under
32 
Executive Order No. 125, series of 1987 otherwise known as the Reorganization Act
21


1 
of the Ministry of Transportation and Communications, as amended, and other
2 
applicable laws, the DOTr or its attached agencies such as the Land Transportation
3 
Office, Land Transportation Franchising and Regulatory Board, and Maritime Industry
4 
Authority, in coordination with the DOE, DENR, DOH, DTI-BPS, and other relevant
5 
government agencies, shali issue the appropriate guidelines and reguiations and the
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
applicable permits, licenses, certificates, or authorizations to virtual pipelines, motor 
vehicies and marine vesseis transporting, storing or processing natural gas, in its 
original state or liquefied form, as well as marine facilities used to import, receive, 
unload, load, transport, process, and store natural gas In its original or liquefied form, 
including those utilized as offshore LNG terminals. The DOTr shall monitor and ensure 
compliance therewith.
SECTION 12. Powers and Responsibilities of the Philippine Competition 
Commission (PCC). - In addition to its functions under Republic Act No. 10667, 
otherwise known as the Philippine Competition Act, the PCC shall exercise primary and 
exclusive jurisdiction over any anticompetitive behavior of midstream natural gas 
industry participants.
CHAPTER III
MIDSTREAM NATURAL GAS INDUSTRY PARTICIPANTS
SECTION 13. Responsibilities of Midstream Natural Gas Industry 
Participants. - All midstream natural gas industry participants shall:
(a) Adhere to all health, safety, security, and environmental standards and all 
codes, rules, regulations, and issuances promulgated pursuant to Chapter II 
of this Act;
(b) Comply with all obligations and responsibilities under this Act to include 
reportorial requirements and submissions pursuant to Chapter II of this Act;
(c) Participate as a member of the technical working group pursuant to Section 5 
of this Act;
22


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
(d) Unbundle their respective fees, if applicable, pursuant to Sections 5,6, and 25 
of this Act; and
(e) Not engage in any anticompetitive behavior.
CHAPTER IV 
LNG TERMINALS
SECTION 14. Importation and Receipt of Naturai Gas through LNG 
Terminais. - Imported natural gas, in its liquefied form, shall only be received, 
unloaded, loaded, processed, stored, and regasified in, and then transmitted, 
transported, and conveyed in accordance with this Act.
SECTION 15. Safety and Exciusion Zone. - Ail LNG terminals shall have a safety 
and exclusion zone to be determined by the DOE in consultation with the technical 
working group created under Section 5 of this Act, relevant government agencies, 
local government units, and public and private stakeholders.
SECTION 16. LNG Terminal Owner and Operator. - An LNG terminal may have 
a separate owner and operator. The LNG terminal owner and operator, should they 
be separate entities, shall be treated as one and the same entity insofar as permits, 
licenses, certificates, and authorizations are concerned, as weli as in the exercise of 
rights and compliance with obligations, standards, regulations, guidelines, and codes 
imposed by this Act, its implementing rules and regulations, and other relevant laws 
and issuances.
SECTION 17. Use and Access of LNG Terminals. - The use and access of LNG 
terminals shall be regulated pursuant to this Act, while the terminal fee shall be 
unbundled In accordance with Section 25 herein and unregulated. All owners and 
operators of LNG terminals shall annually submit their LNG Terminal Development Plan 
to DOE pursuant to Section 5 of this Act.
The DOE shall Issue own use and rTPA permits to owners and operators of LNG 
terminals. The owner and operator of an LNG terminal shall have the option to apply
23


1 
for and hold an own use permit, an rTPA permit, or both permits simultaneously for
2 
each LNG terminal, and perform the functions of an own use LNG terminal permit
3 
holder pursuant to Section 18 of this Act and an rTPA LNG terminal permit holder
4 
pursuant to Section 19 of this Act, to the extent of the capacity ailowed by and during
5 
the length of the time specified in each type of permit, and in accordance with the
6 
LNG Terminal Regulated Third Party Access Code.
7 
Each type of permit shaii specify the capacity and iength of time covered by
8 
the permit: Provided, That the totai capacity of all permits held by an owner and
9 
operator of an LNG terminal for each LNG terminal shall not exceed the maximum
10 
capacity of such LNG terminal. The unutilized capacity of an owner and operator or
11 
its affiliate covered by an own use LNG terminal permit shall be opened to third parties
12 
through the issuance of an rTPA permit and pursuant to the LNG Terminal Regulated
13 
Third Party Access Code. The unutiiized capacity by a third party covered by an rTPA
14 
LNG terminai permit shaii be opened to other third parties pursuant to the LNG
15 
Terminai Regulated Third Party Access Code.
16
17 
SECTION 18. Own Use LNG Terminal. - An own use LNG terminal permit holder
18 
shall:
19 
(a) Exclusively utilize the capacity allowed by and during the length of time
20 
specified in the own use permit, and may aiiow its affiiiates to do the same;
21 
and
22 
(b) Not enter into an nTPA or any similar arrangement with third parties or
23 
otherwise grant use and access of its faciiities to such third parties to the extent
24 
of the capacity allowed and during the length of time specified in the own use
25 
permit, subject to Section 17 of this Act and the LNG Terminal Regulated Third
26 
Party Access Code.
27
28 
SECTION 19. Regulated Third Party Access LNG Terminal. - The issuance of
29 
an rTPA permit to an owner and operator of an LNG terminal shall take into
30 
consideration the capacity and utilization of the LNG terminai, current midstream end
31 
users, existing market conditions, and other reievant information with the end in view
32 
of enabling competition in the naturai gas industry. The use and access of the capacity
24


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
covered by an rTPA permit shall be open to all third parties subject to the payment of 
a terminal fee. An rTPA LNG terminal permit holder shall:
(a) Publicly disclose the capacity available to and utilization by third parties in 
accordance with the reportorial requirements under this Act and the LNG 
Terminal Regulated Third Party Access Code;
(b) Determine the mode of competitive selection of third parties: Provided, That 
each LNG terminal shall determine its own competitive selection process which 
shall be transparent, fair, reasonable, and non-discriminatory subject to .the 
reportorial requirements under this Act;
(c) Provide regulated third party access to the extent of the capacity allowed by 
and during the length of time specified in its rTPA permit; and
(d) Not give any undue preference or advantage to any third party, whether in 
rates, terms, conditions, or special privileges.
CHAPTER V
TRANSPORT AND TRANSMISSION OF NATURAL GAS
SECTION 20. Transport of Natural Gas. - Natural gas, in its original or liquefied 
form, may be transported within the country through virtual pipelines, motor vehicles, 
and marine vessels in accordance with this Act. The use, access, and fees for the 
transportation of natural gas shall be unregulated but shall be subject to the permits, 
licenses, certificates, authorizations, standards, regulations, and guidelines 
promulgated pursuant to Chapter II of this Act.
SECTION 21. Transmission of Natural Gas. - Natural gas may be transmitted 
through dedicated natural gas pipelines or natural gas transmission systems either 
from an LNG terminal or a local natural gas production facility.
SECTION 22. Dedicated Natural Gas Pipelines. - The ownership and operation 
of a dedicated natural gas pipeline shall not be considered a public utility and shall not 
require a legislative franchise, but shall require a permit in accordance with Section 6 
of this Act. Its use, access, and fee for use shall be unregulated, but shall be subject
25


4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
1 
to permits, licenses, certificates, authorizations, standards, regulations, guidelines,
2 
codes, and reportorial requirements as provided in this Act. The owner and operator
3 
of a dedicated natural gas pipeline shall:
(a) Exclusively utilize the capacity of its dedicated natural gas pipeline or allow its 
affiliates to do the same;
(b) Not enter into an nTPA or any similar arrangement with third parties or 
otherwise grant use and access of its facilities to such third parties; and
(c) Inform the ERC of its intent to convert its facilities to a natural gas transmission 
system simultaneous with its application for a legislative franchise as a natural 
gas transmission utility.
SECTION 23. Natural Gas Transmission Systems. - The use, access, and 
terminal fee of a natural gas transmission system shall be regulated. The ownership 
and operation of a natural gas transmission system shall be considered a public utility 
and shall require a legislative franchise. The issuance of a CPCN to a natural gas 
transmission utility shall take into consideration its legal, technical, and financial 
capability.
The use and access to the entire capacity of a natural gas transmission system 
shall be open to all third parties for a natural gas transmission fee, subject to the 
reserve price of the ERC in accordance with Section 6 of this Act: Provided, That in 
the case of a dedicated natural gas pipeline that converts its facilities into a natural 
gas transmission system, existing contracts with affiliates for the use of the pipeline 
at the time of the effectivity of such franchise shall be allowed to continue until the 
end of the contract, which shall not be subject to any extension.
A natural gas transmission utility shall:
(a) Regularly disclose to the public the capacity available for and utilization by third 
parties in accordance with the reportorial requirements under this Act and the 
Transmission Regulated Third Party Access Code;
(b) Determine the mode of and conduct a competitive selection of third parties. 
Provided, That each natural gas transmission utility shall determine its own 
competitive selection process which shall be transparent, fair, reasonable, and 
non-discriminatory, subject to the reportorial requirements under this Act;
26


1 
(c) Ensure that the winning bid does not go beyond the reserve price determined
2 
by ERC pursuant to Section 6 of this Act;
3 
(d) Provide transparent, fair, reasonabie, and non-discriminatory use and access
4 
to third parties;
5 
(e) Not give any undue preference or advantage to any third party, whether in
6 
rates, terms, conditions, or speciai privileges;
7 
(f) Submit annually its Natural Gas Transmission Development Plan to DOE for
8 
review and approval, or the NGTSO, whichever is applicable, pursuant to
9 
Sections 5 and 24 of this Act;
10 
(g) Assign to the NGTSO the operation and maintenance of its natural gas
11 
transmission system upon direction of the ERC after the Interconnection of
12 
natural gas transmission systems and the selection of the NGTSO; and
13 
(h) When applicable, inform and coordinate with the NGTSO for the location,
14 
construction, improvement, operation, utilization, expansion, modification,
15 
rehabilitation, repair, maintenance, decommissioning, and abandonment of any
16 
part of the natural gas transmission system to be undertaken in accordance
17 
with its submitted National Gas Transmission Development Plan.
18
19 
SECTION 24. Natural Gas Transmission System Operator. - The DOE, based
20 
on the Philippine Energy Plan, the Midstream Natural Gas Industry Development Plan,
21 
and the various Natural Gas Transmission Development Plans shall determine the
22 
necessity of and then direct the interconnection of natural gas transmission systems
23 
pursuant to Section 5 of this Act. The DOE shall thereafter select a single independent
24 
NGTSO. The NGTSO shall not be an affiliate of any LNG terminal owner and operator,
25 
natural gas transmission utility, or any midstream end-user. The NGTSO shall:
26 
(a) Operate and manage the interconnected natural gas transmission system in
27 
accordance with the Natural Gas Transmission Code and Transmission
28 
Regulated Third Party Access Code;
29 
(b) Coordinate with natural gas transmission utilities for the location, construction,
30 
improvement, operation, utilization, expansion, modification, rehabilitation,
31 
repair, maintenance, decommissioning, and abandonment of any part of the
27


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21 
22
23
24
25
26
27
28
29
30
31
32
natural gas transmission system in accordance with their submitted Naturai 
Gas Transmission Development Plan;
(c) Furnish midstream natural gas industry participants with sufficient information 
for efficient access to the interconnected naturai gas transmission system;
(d) Procure anciilary services necessary to support the reliable and continuous 
flow of naturai gas through the interconnected naturai gas transmission 
system;
(e) Annuaily prepare a comprehensive Naturai Gas Transmission Development 
Plan based on the submitted Natural Gas Transmission Development Plans of 
natural gas transmission utilities, upon consultation with public and private 
stakeholders, and submit the same for review and approval of the DOE;
(f) Collect an NGTSO fee, subject to the approval of the ERC; and
(g) Perform other functions and responsibilities determined by the DOE and ERC 
pursuant to Sections 5 and 6 of this Act.
CHAPTER VI
RATES, FEES, AND OTHER CHARGES
SECTION 25. Publication and Unbundling of Fees. - LNG terminals with 
regulated third party access, whether through an rTPA permit or a DOE declaration of 
an unutilized capacity, natural gas transmission utilities, and the NGTSO shall identify 
and segregate in their bills to midstream end-users the components of their terminal 
fees, natural gas transmission fees, and NGTSO fee, respectively, and publish the 
same on their website.
SECTION 26. Other Fees and Charges. - The DOE, ERC, and other relevant 
government agencies may Impose reasonable fees for processing applications and 
permits as may be necessary in this Act pursuant to Executive Order No. 292, 
otherwise known as the Administrative Code of 1987, and Republic Act No. 9136 
otherwise known as the Electric Power Industry Reform Act of 2001.
CHAPTER VII
28


1 
PROHIBITED ACTS AND PENALTIES
2
3 
SECTION 27. Prohibited Acts.- Without prejudice to civil and criminal liability, the
4 
following acts shali be prohibited:
5 
(a) For government agencies: failing to comply with the responsibilities under
6 
Chapter II of this Act, and within the timeframes specified in Sections 5, 6, and
7 
37 of this Act;
8 
(b) For midstream natural gas industry participants:
9 
(i) Engaging in activities without the required permits, licenses, certificates,
10 
and authorizations under this Act, specifically:
11 
1. Engaging in the aggregation, supply, importation,
12 
exportation, receipt, unloading, loading, processing, storage,
13 
regasification, transmission, bunkering, and transportation of
14 
natural gas, or the location, construction, improvement,
15 
operation, utilization, expansion, modification, rehabilitation,
16 
repair, maintenance, decommissioning, and abandonment of an
17 
LNG terminal, natural gas transmission system, dedicated natural
18 
gas pipeline, virtual pipeline, and motor vehicles and marine
19 
vessels transporting natural gas without a permit as defined in
20 
this Act from DOE, ERC, or DOTR or its attached agencies,
21 
2. 
Engaging in any activity as a midstream natural gas
22 
industry participant without 
a license, certificate, and
23 
authorization from DENR, DOH, Department of Interior and Local
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Government or its attached agencies, local government units, and
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other relevant government agencies,
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3. 
Operating as an own use terminal without an own use
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permit,
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4. 
Operating as an rTPA terminal without an rTPA permit, and
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5. 
Operating a natural gas transmission system without a
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legislative franchise and a CPCN;
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(ii) Failure to comply with health, safety, security, and environmental 
standards, requirements, and guidelines as well as codes under this Act, 
whichever is applicable, specifically:
1. 
Failure to comply with the PNS or other International 
standards adopted as PNS of the following:
a. Natural gas, in its original or liquefied form,
b. Location, construction, improvement, operation, 
utilization, expansion, modification, rehabilitation, repair, 
maintenance, decommissioning, and abandonment of all 
LNG terminals,
c. Storage and bunkering of natural gas and its respective 
facilities,
d. Virtual pipelines,
e. Motor vehicles and marine vessels transporting natural 
gas,
f. Dedicated natural gas pipelines, and
g. Natural gas transmission systems
2. 
Failure to comply with standards, rules, and regulations in 
the conduct of health risk assessment studies in cases of natural 
gas accidents,
3. 
Failure to comply with the Natural Gas Transmission Code,
4. 
Failure to comply with the LNG Terminal Regulated Third 
Party Access Code, and
5. 
Failure to comply with the Transmission Regulated Third 
Party Access Code,
6. 
Failure to comply with the safety and exclusion zone;
(lii) Failure to submit or disclose required data, information, and documents, 
whichever is applicable, specifically:
1. 
Failure to submit an LNG Terminal Development Plan,
2. 
Failure to submit a Natural Gas Transmission Development 
Plan,
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3. 
Refusal or failure to submit the required data and 
information to the DOE pursuant to Section 5 of this Act,
4. 
Refusal or failure to submit the required documents, data, 
and information to the ERC pursuant to Section 6 of this Act,
5. 
Refusal or failure to submit health data and Information to 
the DOH pursuant to Section 8 of this Act,
6. 
Refusal or failure to publicly disclose the following:
a. Capacity available to third parties,
b. Utilization of capacities by third parties,
7. 
Failure to furnish midstream natural gas industry 
participants with sufficient information for efficient access to the 
Interconnected natural gas transmission system, and
8. 
Failure to inform the ERC of its Intent to convert a 
dedicated natural gas pipeline to a natural gas transmission 
system simultaneous with its application for a legislative 
franchise;
(iv) Failure to comply with the requirements on fees, whichever is 
applicable, specifically:
1. 
Failure to comply with the publication and unbundling 
requirement for the terminal fee, natural gas transmission fee, 
and NGTSO fee, whichever is applicable,
2. 
Collecting an NGTSO fee without the approval of ERC,
3. 
Awarding a winning bid beyond the reserve price 
determined by ERC,
4. 
Collecting a natural gas transmission fee higher than the 
winning bid, and
5. 
Disclosing the reserve price before the determined time by 
ERC;
(v) Failure to comply with the requirements on own use and regulated third 
party access, whichever is applicable, specifically:
1. Allowing a third party to use a portion or the entire capacity 
of a dedicated natural gas pipeline.
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2. 
Entering into an nTPA or simiiar arrangement with third 
parties or granting use and access to third parties to the extent 
of the capacity covered by an own use permit for LNG terminals,
3. 
Refusal or failure to conduct a transparent, fair, 
reasonable, and non-discriminatory competitive selection of third 
parties for the capacity covered by an rTPA permit for LNG 
terminals, or the entire capacity of a natural gas transmission 
system,
4. 
Using or allowing an affiliate to use the capacity covered 
by an rTPA permit for LNG terminals or a portion or the entire 
capacity of a natural gas transmission system without undergoing 
a competitive selection process,
5. 
Giving any undue preference or advantage to any third 
party, whether in rates, terms, conditions, or special privileges,
6. 
Failure to provide transparent, fair, reasonable, and non- 
discriminatory use and access to third parties,
7. 
Failure to comply with mandated regulated third party 
access for unutilized capacity;
(vi) Failure to comply with other responsibilities as midstream natural gas 
industry participants, whichever is applicable, specifically:
1. 
Refusal to participate as an Identified member of the 
technical working group,
2. 
Failure to cooperate in any investigation conducted by 
DOE, ERC, or PCC pursuant to their powers under this Act,
3. 
Failure to comply with the prior approval requirement of 
any sale, assignment, or transfer of control of a midstream 
natural gas industry participant with a DOE issued permit to 
another entity;
4. 
Failure to comply with the directive of DOE for prior 
disclosure of any sale, assignment, or transfer of ownership or 
direct or indirect interests, rights, or participation of a midstream
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natural gas industry participant with a DOE issued permit to
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another entity;
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5. 
Engaging in anti-competitive behavior,
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6. 
Refusal or failure to assign to the NGTSO the operation
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and maintenance of its natural gas transmission system upon
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directive of the ERC,
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7. 
Refusal or failure to inform and coordinate with the NGTSO
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or the natural gas transmission utilities, whichever is applicable,
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for the location, construction, improvement, operation, utilization,
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expansion, modification, rehabilitation, repair, 
maintenance,
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decommissioning, and abandonment of any part of the natural
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gas transmission system,
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8. 
Failure to secure ancillary services necessary to support
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the reliable and secure flow of natural gas through the
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interconnected natural gas transmission system, and
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9. 
Failure to comply with other responsibilities not otherwise
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SECTION 28. Penalties. - Without prejudice to civil and criminal liability, the
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following administrative penalties shall be imposed upon any natural or juridical person
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for every prohibited act enumerated below:
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(a) Section 27 (a): Fine not exceeding the equivalent of six (6) months' salary or
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suspension not exceeding one (1) year, or removal depending on the gravity
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of the offense;
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(b) Section 27 (b):
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I. First Offense: Rne of not less than Five hundred thousand pesos
27 
(P500,000) for every day of non-compliance, and if applicable,
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suspension of permits, licenses, certificates, or authorizations until the
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violation is corrected,
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ii. Second Offense: Fine of not less than One million pesos (P1,000,000)
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for every day of non-compliance, and if applicable, suspension of
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permits, licenses, certificates, or authorizations until the violation is 
corrected, and
iii. Third Offense: Fine of not less than Five miiiion pesos (P5,000,000), 
revocation of permits, licenses, certificates, or authorizations, and 
disqualification from appiying for future permits, licenses, certificates, or 
authorizations. In the case of natural gas transmission utilities, DOE and 
ERC shall recommend the revocation of their respective franchises to 
Congress. In the case of the NGTSO, it shall be replaced.
Provided, That the administrative penalty for Section 27(b)(vi)(5) shall be 
pursuant to Section 29 of the Philippine Competition Act.
CHAPTER VIII 
FINAL PROVISIONS
SECTION 29. Incentives. - LNG terminals, storage facilities, bunkering facilities, 
dedicated own use natural gas pipelines, and natural gas transmission systems, shall 
be included in the Strategic Investment Priority Plan subject to an evaluation process 
and shail be entitled to the incentives and for the length of time provided under 
Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, 
as amended by Republic Act No. 11534, otherwise known as the Corporate Recovery 
and Tax Incentives for Enterprises Act, and other appiicable laws.
SECTION 30. Permits and Licenses. - All permits, licenses, certificates, and 
authorizations issued pursuant to this Act shall be streamlined and shall be covered 
by Republic Act No. 11234, otherwise known as the Energy Virtual One-Stop Shop Act, 
except for those whose time frames are expressly provided herein.
SECTION 31. Pubiic Access to Information. - The DOE, ERC, and other relevant 
government agencies shaii aliow public access, through its website, to all data and 
information submitted in the implementation of this Act: Provided, That such access 
is compiiant with Section 32 hereto.
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SECTION 32. Treatment of Confidential Information. - The DOE, ERC, and
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other relevant government agencies shall not disclose any proprietary and confidential 
information to the public and to other midstream natural gas industry participants 
unless prior consent of the source or owner of such information has been obtained by 
the requesting party: Provided, That prior consent shall not be required if the 
proprietary and confidential information is requested by a government agency and the 
request is made in performance of its functions: Provided further. That the requesting 
government agency shall not disclose the proprietary and confidential Information to 
the public and to other midstream natural gas industry participants.
SECTION 33. Establishment of Dedicated Offices. - The DOE and the ERC shall 
establish dedicated bureaus or offices for the effective implementation of this Act. The 
organizational structure and staffing complement shall be determined by the DOE 
Secretary and ERC Chairperson respectively, with approval of the Department of 
Budget and Management or the Office of the President, whichever is applicable, and 
in accordance with existing civil service rules and regulations.
SECTION 34. Appropriations. - The amount of Seventy-five million pesos 
(P75,000,000.00) shall be charged against the current year's appropriations of the 
DOE and the amount of Seventy million pesos (P70,000,000.00) shall be charged 
against the current year's appropriations of the ERC, all for the initial Implementation 
of this Act. Thereafter, such amounts necessary for the sustainable Implementation 
of this Act shall be included in the annual General Appropriations Act.
SECTION 35. Congressional Oversight. - The Joint Congressional Energy 
Commission (JCEC) shall exercise oversight powers over the implementation of this 
Act. The DOE, ERC, and other relevant government agencies shall submit annual 
reports to the JCEC not later than the fifteenth day of September, which shall include 
the latest relevant data, implementation review and reports, and policy and regulatory 
issuances.
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SECTION 36. Transitory Period. - All midstream natural gas Industry participants 
shall comply with the provisions of this Act within five (5) years from its effectivity: 
Provided, That health, safety, security, environmental, construction, operation and 
other permits, licenses, certificates, and authorizations issued prior to the effectivity 
of this which are not inconsistent herewith shall remain valid.
Natural gas transmission systems existing at the time of the effectivity of this 
Act shall be allowed to continue pursuant to the terms and conditions indicated In their 
franchise and until the lapse of the period accorded to them In the franchise.
SECTION 37. Implementing Rules and Regulations. - The DOE and ERC, in 
consultation with the relevant government agencies, and public and private 
stakeholders, shall issue the implementing rules and regulations (IRR) of this Act 
within six (6) months from its promulgation.
SECTION 38. Separability Clause. - Any provision of this Act, which may be 
declared unconstitutional or Invalid shall not have the effect of nullifying other portions 
or provisions hereof.
SECTION 39. Amendatory and Repealing Clause. - The specific provisions of 
Republic Act No. 387, otherwise known as the Petroleum Act of 1949, and Presidential 
Decree No. 334, Creating the Philippine National Oil Company, Defining Its Powers and 
Functions, Providing Funds Therefor, and For Other Purposes, that are Inconsistent 
with this Act are hereby amended or repealed accordingly.
All other laws, ordinances, rules, regulations and Issuance or parts thereof, that 
are inconsistent with this Act, are likewise amended or repealed accordingly.
SECTION 40. EfTectivity Clause. - This Act shall take effect fifteen (15) days after 
its publication in the Official Gazette or one (1) newspaper of general circulation.
Approved,
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