FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
) 
) 
) 
First Regular Session 
SENATE 
Senate Bill No.28 6 3 
By Senator Teofisto "TG" L. Guingona III 
EXPLANATORY NOTE 
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,IUN -2 P 4 :13 
It is a known fact that fuel is a necessary driver of a robust economy. Metro Manila alone is 
in need of a steady source of fuel and other petroleum products. Increased demand for petroleum 
products necessitates a fast, steady, efficient, safe and cost effective mode of transport. 
Studies show that petroleum pipelines are still the safest and most efficient way of 
transporting petroleum products from one point to another. First, pipelines ensure lower delivery 
cost, contributing to lowering the cost of fuel to consumers. Second, pipelines are not affected by 
weather disturbances such as typhoon, flooding and other tidal changes. Third, pipelines reduce the 
traffic congestion in heavily trafficked areas, especially highly urbanized and populated C1tles. 
Fourth, by transporting petroleum products through pipelines, there IS a lower risk of product 
contamination and the product volume is not diminished through evaporation. More volumes can 
be transported faster through a pipeline than through trucks, barges or lorries. Fifth and more 
importantly, petroleum pipelines have a lower carbon footprint in comparison to the use of barges, 
lorries or trucks. 
The environmental impact of pipelines is relatively minimal compared to other 
modes of transportation. 
If properly maintained, pipelines pose lower risk to life and limb as well as damage to or loss 
of property compared to other conventional modes of transportation while providing a more 
efficient, reliable and sustainable means of transporting liquid petroleum products. In order to 
protect tl1is vital infrastructure, protect public interest and encourage private sector participation 111 
this industry, there is a need to establish a clear and comprehensive regulatory framework providing 
for the basic standards for the design, construction, operation and maintenance of hquid petroleum 
pipelines. 
This bill seeks to provide a l)etroleum Pipeline Code that will provide for such a 
regulatory framework. This bill also seeks to strengthen the jurisdictlOn and power of the 
Department of Energy over pipelme operations. 
In view of the foregoing, the in~mediate enactment of this meaSure is earnestly sought. 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. NO. 2863 
) 
) 
) 
By Senator Teofisto "TG" L. Guingona III 
AN ACT TO PROVIDE A PETROLEUM PIPELINE 
CODE TO PRESCRIBE STANDARDS FOR THE 
DESIGN, CONSTRUCTION, OPERATION AND 
MAINTENANCE 
AND 
ABANDONMENT 
OF 
LIQUID 
PETROLEUM 
PIPELINES 
AND 
STRENGTHENING FOR THIS PURPOSE THE 
JURISDICTION 
AND 
POWER 
OF 
THE 
DEPARTMENT OF ENERGY OVER PIPELINE 
OPERATIONS, 
APPROPRIATING 
FUNDS 
THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted b)' the Senate and Honse of Representatives of the Philtppines in Congress assembled: 
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CHAPTER I 
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GENERAL PROVISIONS 
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Section 1. Short Tide. -This Act shall be known as the "Philippim Pipelt'neAct". 
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Section 2. Declaration of Policy. - It is hereby declared the policy of the State to: 
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JUN -2 P4:13 
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1. Promote transportation of liquid petroleum products through p1pelines as a safe and 
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efficient way of transporting liquid petroleum products; 
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2. Provide for basic safety rules in petroleum pipeline operations and enhance reliability in 
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the transportation of oil andliqnid petrolenm products by pipeline in the country; 
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3. To encourage the inflow of private capital to encourage the use and development of 
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petroleum pipelines; and 
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4. To protect the public interest by ensuring the unhampered use of pipehnes as a mode of 
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transporting petroleum, especially to urban areas. 
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Section 3. Scope and Application. Except as otherwise provided herein, this Act shall apply to all 
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existing and future petroleum pipelines in the country, 
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Section 4. Definition of Terms. -
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a) Act - shall refer to the Philippine Pipeline Act; 
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b) Concession - shall refer to the authority granted to a Person for the right to own, 
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establish, provide, construct, install, operate and maintain Petroleum Pipeline systems 
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for transporting Petroleum Products; 
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c) Contraot of COII,~ssiotl - shall refer to the agreement executed between the DOE on 
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behalf of the Government of the Republic of the Philippines and a Pipelme Operator 
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granting a Pipeline Concession; 
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d) Crude Oil - means od in its natural state before the same has been refined or otherwise 
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treated, excludtng water and foreign substances 
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e) DILG - shall refer to the Department of Interior and Local Government; 
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f) 
DOE - shall refer to the Department of Energy; 
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g) DOH - shall refer to the Department of Health; 
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h) DOTC - shall refer to the Department of Transportation and CommunicatIOns; 
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i) 
DPWH - shall refer to the Department of Public Works and Highways; 
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j) 
Grantee -
shall refer to a Person to whom a ConcessIOn for Petroleum Pipeline 
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Operations has been granted by law; 
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k) Local Governmett{ Units or LGUs - shall refer to the local government umts created under 
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the Local Government Code; 
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MMDA - shall refer to the Metro Manila Development Authority; 
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m) National Pipeline Board or NPB - shall refer to the Board created under Chapter VI, 
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Section 16 of this Act; 
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n) Petrolellm Pipeline - shall refer to the system of Pipelines, including related Pipeline 
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Facilities through which Petroleum Products are transported, including without 
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limitation the pipeline, valves, break out tanks and other appurtenances connected to 
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the pipeline and pumping units; 
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0) Petroleum Products - shall refer to any liquid petroleum product obtained from distilling 
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and processing of crude oil, unfinished oils, natural gas liquids and other hydrocarbon 
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compounds. The term shall exclude natural gas and liquefied natural gas. 
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p) Petroleum Pipelim Operatiolls -
shall refer to the business of engag111g 
111 the 
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Transportation of Petroleum Products through a Petroleum Pipeline; 
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q) Petroleum - shall refer to crude oil, condensate,and liquefied petroleum gas; 
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r) 
PetJOll - includes a natural person, corporation, or partnership; 
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s) 
Pipeline or line Pipe - shall refer to a tube, usually cylindrical, through which hquid 
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Petroleum Product flows from one point to another; and 
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t) 
Pipeline Facilz[y(t'es) - shall refer to a new or existing Pipeline, 111cluding rights-of-way and 
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any equipment, facility or building used in the Transportation of Petroleum Products; 
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u) Ptpelz"ne Operators - Persons operating Petroleum Pipeline or Pipeline systems 
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v) PNP - shall refer to the Philippine National Police; and 
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w) TratlSpottatioti if Petroleum P1YJducts -
shall refer to the conveyance, carnage or 
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transmission of Petroleum Products through a Petroleum Pipeline(s). 
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CHAPTER II 
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DEPARTMENT OF ENERGY'S JURISDICTION 
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Section 5. Jurisdiction. This Act strengthens and confirms the sole regulatory and administrative 


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power and authority of the DOE to supervise and regulate Petroleum Pipeline Operations. In 
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addition to its existing powers and functions, the DOE shall have the sole responsibility to supervise 
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and regulate Petroleum Pipeline Operations. It shall: 
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(a) Formulate, in consultation with petroleum pipeline industry participants, a Petroleum 
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Pipeline Code and such other rules and regulations to Implement this Act, provided that 
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said regulations shall not be inconsistent with the standards and regulations adopted 
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under the Petroleum Pipeline Code; 
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(b) Ensure the reliability and safety of transporting liquid petroleum products through 
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pipelines; 
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(c) Enforce the Petroleum Pipeline Code as well as rules and regulations implementing tl11S 
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Act; 
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(d) Exercise original and exclusive jurisdiction over quesTIons and cases involving 
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Concessions as well as fees and fines imposed by tl1e DOE 111 the exercise of tl1e 
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foregoing functions; and 
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(e) Exercise such other powers and functions as may be necessary to attain the objectives of 
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this Act. 
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CHAPTER III 
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PIPELINE CONCESSION 
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Section 6. Namre of a Pipeline Concession. A Concession IS an authority granted to a Person 
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for the righ t to establish, own, operate and maintain a Petroleum Pipeline( s) for transporting 
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Petroleum Products. No Person may engage in Petroleum Pipeline Operations without a valid 
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Concession obtained from the DOE; provided tlut, Persons who are holders of exist111g 
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Concessions or are existing Pipeline Operators shall not be required to secure a new Concession 
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from the DOE for tl1e remaining period of their current Concession. 
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Section 7. Philippine Ownership Requirement. 
No Concession for the ownership, 
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establishment, operation and maintenance of a Pipeline shall be granted except to citizens of tl1e 
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Philippines or to corporations or associations organized under the laws of the Philippines at least 
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sixty percent (60%) of whose capital is owned by such citizens. 
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Section 8. 
Term of Concession. The Concession shall be valid for a term of twenty five (25) 
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years, renewable for anotl1er twenty five (25) years, provided that, due consideration will be given for 
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the automatic renewal of the Grantee's Concession in view of tl1e Grantee's sizeable investments, 
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infrastructure and installations or, the necessity andlor urgency of maintaining tl1e Pipehne to serve 
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public interest. 
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For existing Pipeline Operators, the term of their Concession shall be as provided in tl1eir existmg 
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Concession Agreements; provided tl1at, existing Pipeline operators may apply for a ConcessIon 
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under this Act prior to the expiration of tl1eir current Concession. 
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CHAPTER IV 
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PROCEDURES FOR APPLICATION OF CONCESSION 
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Section 9. Application of Concession. Any applicant for Concession shall apply witl1 the DOE 
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pursuant to the requirements herein. An application for Concession under this Act shall be filed 
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with the Oil Industry Management Bureau (OIlVlB) of the DOE, or such otl1er equivalent attached 
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agency of tl1e DOE (as may be determined by the Secretary of the DOE) which shall examine and 
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pass upon tl1e same as well as upon the qualifications of tl1e applicant. 
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Section 10. Requirements. The applicant must demonstrate that it is legally existing and qualified 
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to conduct its business under Philippine laws and, taking into account the length and location of the 
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Petroleum Pipeline, is fmancially and technically capable of operating and maintaining the same 
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pursuant to this Act, tl1e Pipeline Code and the rules and regulations implementing this Act. 


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Section 11. Public Notice. The OIMB shall issue a public notice of all Concession applicatlOns and 
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afford mterested parties an opportunity to comment on such applications. If no opposition is tiled 
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within the period provided in the public notice, it shall be conclusively presumed that no such 
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opposition exist. Thereafter, no objection from third parties to the granting of the Concession shall 
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be heard and the Contract of Concession shall be executed by the Secretary of the DOE on behalf 
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of and for the Republtc of the Philtppines, and the Grantee, in accordance with thIS Act, the 
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implementing rules and regulations and ~'(isting laws. 
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Section 12. 
Disposition of Opposition to the Concession. 
If an OppOSItion is iiled in 
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accordance with Section 11 hereof, the DOE shall, decide based on the qualiiications of the 
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applicant pursuant to this Act, the implementing rules and regulations as well as merits of the 
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oppositor's claims if the applican t is duly qualiiied to be granted a Concession, provided that 
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preference shall be gIVen to existing Pipeline Operators or Grantees of Concession under previous 
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laws. The DOE may require submission of additional documents and other papers and shall render 
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a decision within iifteen (15) days from the date of iiling of the Opposition or from d1e date d1e 
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case is deemed submitted for resolution as may be provided in d1e implementing rules and 
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regulations, without prejudice to d1e right of any aggrieved party to appeal to d1e courts pursuant to 
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the Rules of Court. 
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Section 13. Issuance of Concession. The DOE shall issue a Concession upon its determination 
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that the establishment, operation and maintenance of a Petroleum Pipeline(s) by dle applicant IS 
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consistent with dlis Act. The Contract of Concession shall state definitely d1e principal rights and 
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obligations of d1e parties concerned pursuant to this Act. 
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Section 14. Registry of Pipeiirle Operators. - The DOE shall establish and mamtain a registry 
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of all pipeline operators or Concession Grantees. 
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CHAPTER V 
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RIGHTS GRANTED 
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Section 15. 
Grant of Rights. 
Grantees of Pipeline Concessions acquire the right to own, 
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construct, establish, operate and maintain a Petroleum Pipeline to transport Petroleum Products, by 
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means of, and through, a Pipeline or system of Pipelines, between d1e sources of production and/or 
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refming and/or supply (storage) dle places defined in the PIpeline Concession, in accordance WIth 
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d1e provisions of this 1\ct and the implementing rules and regulations. 
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This right includes the construction, installation and operation of pipelines, pipeline facilitIes, 
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pumping stations, storage tanks and odler building~, water supply and communication systems, 
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roads, and such od1er equipment or facilities as may be needed by the Grantee to conduct its 
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Petroleum Pipeline Operations. 
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Among other things, the Concession Contract shall state definitely: 
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(a) The right of d1e Grantee to own, construct, install, operate and maintain a Petroleum 
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Pipeline system passing d,rough a designated area(s), specifying the province(s), city(ies) 
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and/or municipality(ies); 
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(b) The Grantee's right to acquire rights of way, casements and other similar rights on, over, 
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under, acro~s and through t11e designated area(s) or adjacent thereto. 
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(c) The right of eminent domain to be exercised by the Government, as represented by the 
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DOE, for and on behalf of and/or through d1e Grantee, over private property when d1e 
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occupation of private land is needed by the Grantee in connection with his Concession, for 
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the purpose of constructmg, installing, mamtaining and operating Petroleum Pipehnes, 
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roads, wells, tanks, reservoirs, pumping stations for public use or benefit. 
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(d) Term of the Concession; 
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(e) Right to receive assistance from d1e DOE in obtainmg fiscal and non-fiscal mcentives 
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granted by d1is Act; 
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(f) Right to receive assistance from DOE and/or other government instrumentalities in 
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securing permits, licenses and clearances relating to d1e Petroleum Pipeline Operations; and 


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(g) Other rights consistent with this Act. 
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CHAPTER VI 
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THE NATIONAL PIPELINE BOARD AND THE PIPELINE CODE 
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Section 16. National Pipeline Board There is hereby created the National Pipeline Board (the 
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"NPB"). The NPB shall be composed of the Secretary of the DOE as Chairman and the Secretanes 
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of the Department of Environment and Natural Resources, Department of Transportation and 
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Communication and the Department of Public Works and H1ghways, as members, and 
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representatives from Pipeline Industry operators, who shall automatically be members by reason of 
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being Grantees of a Pipeline ConcesslOn. 
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The DOE Secretary, in his capacity as Chairperson, shall, within thirty (30) days from the effectivity 
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of this Act, convene the NPI3 to discharge its powers and functions as provided in Section 17 
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hereof. 
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The Board shall be assisted by a Technical Secretariat attached to the Oil Industry Management 
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Bureau of the DOE. The number of staff of the Technical Secretariat and the correspondmg 
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positions shall be determined by the Board, subject to approval by the Department of Iludget and 
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Management (DBM) and existing civil service rules and regulations. 
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Section 17. Powers and Functions of the NPB. 
The NPB shall have the following powers and 
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functions: 
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a) It shall recommend to the DOE the standards for the design, construction, pressure testing, 
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operation, and maintenance, corrosion control and abandonment of Petroleum Pipeline 
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systems. Within thirty (30) days from enactment of this Act, the NPB shall formulate a 
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Petroleum Pipeline Code for approval by the DOE. The NPB may adopt such relevant and 
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applicable standards from the United States Department of Transportation Regulations and 
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American Society of Mechanical Engineers on Petroleum Pipelines as well as other 
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internationally accepted standards for Petroleum Pipelines. In view of changes in 
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internationally accepted Petroleum Pipeline standards and Pipelme technologies, the NPB 
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may revise and/or amend the Petroleum Pipeline Code; provided that, the NPB may only 
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introduce amendments after sufficiently holding consultations with all its members to ensure 
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transparency and further encourage private sector participation. The NPB may call on 
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members from tl1e academic community and experts from the private sector, and other 
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pipeline industry participants as resource persons to aid in updating the Petroleum Pipeline 
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Code. 
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There shall be a mandatory rev1ew of the Petroleum Pipeline Code set pursuant to the 
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provisions of this Act every two (2) years. 
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b) In carrying out its duties and functions under this section, it shall, wherever appropnate, be 
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authorized to utilize agencies of tl1e government to obtain technical, economic and statistical 
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information and advice. 
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c) It shall conduct periodic analyses of the domestic transport of Petroleum Products by 
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Pipeline. Such analyses should identify the areas through which the Pipeline traverses where 
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unplanned loss of Petroleum Pipeline may cause shortages of Petroleum Products or price 
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disruptions and where shortages of Pipeline capacity and reliability concerns may have or are 
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anticipated to contribute to shortages of Petroleum Products or price disruptions. Upon 
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identifying such areas, tl1e NPB may determme 1f the current level of regulation is suffic1ent 
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to minimize the economic impact for such unplanned losses of Pipeline capacity. 
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In preparing any analysis hereunder, the NPB may consult with the heads of other 
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government agenCles and public and private sector experts in Petroleum P1peline OperatlOns 
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and other forms of Transportation of Petroleum products, energy consumption, pipeline 
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capacity, population and economic development. 


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CHAPTER VII 
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RIGHT OF WAY; EXPROPRIATION; EASEMENT 
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Section 18. Grant of Right of Way As may be required by the DOE and/or granted by the 
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Concession, all government agencies and/or instrumentalities, including but not limited to the 
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DP\VH, the relevant LG Us, MMDA, thClr successors and assigns, shall grant the necessary right of 
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way over non-private property within thelr jurisdiction. 
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Section 19. Priority Due to the importance of a steady, safe and efficient supply of Petroleum 
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Products, priority shall, whenever practlcable, be given to Pipeline Operators 111 acquiring right of 
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way over government property. 
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Section 20. Right of w.'1y Over Private Property; Expropriation. The DOE shall assist and/or 
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represent Grantees of Concessions in procuring the necessary right of way over private property. 
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When the occupation and/or possession of private land is needed by the Grantee in connectlon 
17 
with its Concession, for the purpose of constructing, installing, maintaining and operating pipe lines, 
18 
reservoirs, wells, roads, railroads, telephone and telegraph lines, airfields, radio stations, powerhouses, 
19 
transmission lines, pumping statlons, wharves, piers, and terminals, which are hereby declared to be 
20 
for public use or benefit, the right of eminent domain may be exercised by the Government, as 
21 
represented by the DOE, for and on behalf of the Grantee, in accordance with the applicable laws 
22 
on the matter. 
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In all cases of voluntary agreement between the Grantee and a private landowner, a copy thereof 
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shall be furnished the DOE. 
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For the purpose of this Section, the necessity of the work in Petroleum Pipeline Operations will be 
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presumed in the cases of construction of Pipelines, tanks, pumping stations, power systems, and 
29 
other means of transportation and commu1l1cation, including any auxiliary facilities and works. 
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Section 21. Easement Over Public Land -
When casement or right of temporary occupancy 
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over public land is needed by a Grantee for the purpose of carrying out any work necessary to lts 
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Petroleum Pipeline Operations, such right may be granted by the Government through the DOE 
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subject to applicable laws and regulations. The same presumption in Section 20 applies in this 
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instance. 
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CHAPTER VIII 
39 
COMPLIANCE WITH STANDARDS 
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Section 22. Petroleum Pipeline Code. 1\11 Grantees of a Pipeline Concession under this Act shall 
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provide safeguards for the safety, reliability, adequacy, security, stability and integrity of their 
43 
Petroleum Pipeline systems in accordance with the technical specifications and performance 
44 
standards set forth in the Petroleum P1peline Code to be promulgated by the NPB, as may be 
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amended. 
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CHAPTER IX 
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PIPELINE SECURITY 
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Section 23. Pipeline Security; One Call System. It is hereby declared that Petroleum Pipeline 
53 
systems are imbued with public interest. For this purpose, the DOE, in coordination with the 
54 
DND, DPWI-I, PNP, MMDA, DILG, LGUs and the appropriate government agencies and 
55 
instrumentalities shall implement a one-call system, whereby any third party(ies) shall report to a 
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designated agency any possible excavation, ins tallation or activity which may affect Pipelines as well 
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as any act which may result in damage to property or injury to persons. The one-call system is 
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intended to bring to lmmediate notice of the foregoing to the affected Pipeline Concession Grantee 
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and/ or other underground utility providers and to provide a mechanism for immediate haison and 
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coordination with all relevant government agencies to avoid damage to or loss of property as well as 
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injury to persons. 


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The DOE shall implement a procedure for a systematic response to emergency cases, including 
without limitation, incidents involving leaks, breaches on the Pipelines or Pipeline facilities and other 
similar occurrences, whereby there will be immediate, appropriate and coordinated response actlOns 
from the concerned LGUs, Bureau of Fire Protection, the DENR, DOH and such other 
government agencies and instrumentalities. In case of remediation or clean-up, the DENR shall be 
the lead agency (in coordination with other government agencies or instrumentahties) in dIrecting 
the clean-up of affected areas premised on a risk-based criteria. 
Sectiol1 24. 
Inter-agency Cooperation. - If and wben necessary, the DOE shall consult, 
participate, cooperate and enter mto agreement wIth other government agencies 
and 
instrumentalities, non-governmental organizations or people's organizations an? pnvate enterprises 
in the furtherance of d1e foregoing objectives. 
CHAPTER X 
ROLE OF GOVERNMENT AGENCIES 
Section 25. Role of Government Agencies. In the Implementation of d1e provisions of this Act, 
its implementing rules and regulations and related laws, the followmg agencies shall perform, among 
others, d1C following functions: 
a) The DOTC shall: 
(i) 
Assist m coordinatmg networks for the 'Iransportatlon of Petroleum as well 
as the fast and safe transportation services, as determined by the DOE; and 
(ii) 
When requested by the DOE, assist the DOE 111 identlfY111g routes, zones 
andlor areas of operations of particular operators. 
b) The DPWH shall, when necessary, provide d1e technical support in d1e construction and 
installation of Petroleum Pipelines. 
c) The DILG shall: 
(i) 
Provide, through d1e Philippine National Police (PNP), manpower and 
available resources to Grantees of Pipeline Concessions in cases of threats to 
security of d1e Pipelines and other similar acts; 
(ii) 
Employ the assistance, cooperatIon and coordination of LGUs in the 
implementation of the policies and orders issued by the DOE; and 
(iii) 
Mobilize the Bureau of Fire Protection (BFP) to ensure d1e prevention and 
suppression of all destructive fires on d1e Petroleum Pipeline installations. 
d) The LG Us, where d1e Pipelines are situated, shall share in the responsibility in implementing 
safety and prevention measures within their territorial jurisdiction solely Wlth respect to third 
parties who may affect the Pipelines situated within their respective territorial jurisdictions. 
CHAPTER XI 
ABANDONMENT IDE-COMMISSIONING 
Section 26. Abandonment/Decommissioning. At the expiration of the term of d1e ConcesslOn 
or a renewal thereof, or whcn a Pipeline has come to the end of its useful life andlor users or 
customers of the Petroleum Product have discontinued using the Pipeline to transport Petroleum 
Products andlor there are no foreseeable new users or customers in the future, the Grantee shall 
undertake Pipeline decommissioning and cleaning. 
The Pipelines shall be cleaned and 
decontaminated before it can be either left in its existing place or dismantled for proper disposal. 
The DOE, through appropriate regulations, may provide guidelines for: 


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a) 
the clean-up of residual fluids in the Pipeline and proper disposal thereof in accordance 
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with applicable emnronmen tal laws and regulations; 
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b) decontaminated Pipelines which may be trenched or buried underground, provided 
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environmen tal concerns have been addressed; and 
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c) whether such Pipelines can be left in place without creating any risk to the surrounding 
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environment or to the community. 
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Section 27. Decommissioning Fund. For this purpose, the DOE shall, after public consultation 
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with Pipeline Operators and Pipeline industry participants, implement a system whereby the Pipeline 
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Operator shall collect from its users or customers decommissioning costs/fees, to be agreed upon 
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between the Pipeline Operator and the users/customers. These decommissioning costs/fees shall 
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be held in a Decommissioning Fund, established jointly by tile Pipeline Operator and its 
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users/ customers and administered by tile Pipeline Operator specifically to pay for the costs of 
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decommissioning. The Decommissioning I'und shall not be subject to Value Added Tax, income 
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tax and such otller taxes, charges and fees. 
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CHAPTER XII 
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FISCAL INCENTIVES / TAXATION 
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Section 28. Taxes. Pipeline operations shall be subject to the payment of all taxes, duties, fees or 
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charges and other impositions under the National Internal Revenue Code of 1997, as amended, and 
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other applicable laws; provided however, that, in recognition of tile substantial investments needed 
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for the construction, installation, operation and maintenance of the Grantee, the Grantee shall be 
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entitled to income tax holiday and such other incentives granted to pioneer enterprises under the 
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Omnibus Investments Code, as amended. 
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Section 29. Customs Duties. The Grantee may import, free of applicable customs duties and 
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charges, all equipment, machinery, material, 111struments, supplies and accessories necessary for the 
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installation, construction, operation and maintenance of tile Petroleum Pipeline. 
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CHAPTER XIII 
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FORCE MAJEURE AND/OR FORTUITOUS EVENTS 
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Section 30. Force Majeure/ Fortuitous Events. -
Failure on the part of the Grantee to fulfill 
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any of tile terms and conditions provided by this Act or its implementing rules and regulations or by 
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other relevant laws shal! not be deemed a breach of such obligation on the part of the Grantee in so 
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far as such failure results from force majeure and/ or fortuitous events, including without limitation, 
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acts of God, war, insurrection, riot, civil commotion, stnke, tlde, storm, flood, lightning, explosion, 
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fire earthquake, passage of laws, orders and rules and any other happening whIch the Grantee could 
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not reasonably prevent or control or avoid. 
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CHAPTER XIV 
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PROHIBITED ACTS 
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Section 31. 
Prohibited Acts. Without the prior written consent of the Grantee, it shall be 
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unlawful for any Person to: 
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a) Demolish, excavate, tunnel, or construct, drill, instal!, or make improvements within five (5) 
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meters from tile nearest portion of the Pipeline facility; 
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b) Cut, smv, shce, separate, split, sever, SITlelt, remove, mutilate, alter, tap, reconnect, disconnect, 
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or in any way tamper any Pipeline or part thereof, or any other pIpeline-related installation 


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from the place of installation of any other place or site where it may be rightfully or lawfully 
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situated; 
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c) Take, carry away, transport, transfer, move, with or ""~thOlit the lise of a motor vehicle or 
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any other means of conveyance, the Pipeline, or part thereof, or any other Pipeline related 
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installation; 
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d) Store, possess, or otherwise keep in his premises, custody or control, any portion of the 
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Pipeline including Pipeline-related installation; and 
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e) Knowingly use or receive the direct benefit of petroleum delivery service obtained through 
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any of the acts mentioned in paragraphs (a), (b), (c) and (d) above. 
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Section 32. Fines and PeIlalties for Unlawful Acts. -
Any person who commits any of the 
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foregoing acts shall suffer the penalty of a fine of not less than Ten thousand pesos (1'10, 000) but 
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not more than Five Million Pesos (p5, 000,000) or imprisonment of not less than six (6) months, or 
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bofh shall be imposed. If the offender is a juridical person, the preSident, manager, directors, 
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trustees, officers or fhe officials directly in charge of fhe operations shall suffer the penalty herein 
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provided. 
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CHAPTER XV 
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APPROPRIATIONS 
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Section 33. Appropriations. Such sums as may be necessary for fhe initial implementation of fhis 
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Act shall be taken by the DOE from its annual appropriations. 
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Thereafter, the fund necessary to carry out fhe provisions of th1s Act shall be mcluded m fhe annual 
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General Approptlations Act. 
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CHAPTER XVI 
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FINAL PROVISIONS 
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Section 34. Implementing Rules and Regulations. The DOE, in coordination witll tlle NPB, 
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shall promulgate the necessary implementing rules and regulations within thirty (30) days after tlle 
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effectivity of this Act. 
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There shall be a mandatory review of fhe implementing rules and regulations and the pipeline 
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standards set pursuant to fhe provisions of this Act every two (2) years. 
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Section 35. Separability Clause. If any prov1s10n of this Act is declared invalid or 
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unconstitutional, tl1e other provisions not affected tllereby shall remain valid and subsisting. 
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Section 36. Concessions Granted Prior TO this Actj Non-Retroactivity. Concessions which 
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have been granted under previous laws at fhe time this Act becomes efIective, shall remam effecuve 
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and shall continue to operate under tlleir existing Concessions or authority. 
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Section 37. Grantees of Concessions Under Other Laws. Nothing in fhis Act shall be deemed 
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to revoke any existing Concession granted under fhe Petroleum Act of 1949, as amended, or other 
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administrative or regulatory permit, authority or contract, which Concession, Permit, Authority or 
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Contract shall be allowed to its full term or renewal thereof, but may not be renewed except 
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pursuant to the provisions of fhis Act. 
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Section 38. Pl'eCllrsor laws. Under the Petroleum Act of 1949, as amended, the power to grant 
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pipeline concessions was granted to the Secretary of Agnculture and Natural Resources. 
The 
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authority over pipeline concessions under the Petroleum Act was transferred to the Petroleum Board 
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pursuant to Presidential Decree No. 782 dated 25 August 1975. 
The Petroleum Board was 
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thereafter abolished and its powers and functions were transferred to the Energy Development 
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Board in accordance with PresIdential Decree No. 910 dated 22 March 1976. 
The Energy 
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Development Board CEDB) was abolished by Presldentjal Decree No. 1206 dated 6 October 1977. 
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The powers and functions of the EDB were transferred to the Bureau of Energy Development 
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under the Department of Energy pursuant to Section 12 of I'D No. 1206. Presidential Decree No. 
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1700 issued on 10 July 1980 amended Presidenual Decree No. 1206 by transferring the power to 
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regulate and fix the rates of pipelme concessionaires under the Petroleum Act to the Board of 
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Energy. The powers of the Board of Energy to grant and regulate pipeline concessions were later 
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transferred to tlle Energy Regulatory Board under Section 3 of Execuuve Order No. 172. ExecutIve 
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Order No. 193 abolished the Bureau of Energy Development on 10 June 1987 and transferred its 
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pertinent functions to the Office of the Deputy Executive Director for Energy Operations of the 
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Office for Energy Affairs. The non-price regulatory jurisdiction, powers and functions of the 
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Energy Regulatory Board were thereafter transferred to the DOE, pursuant to Sections 12 Cc) and 
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18 of Republic Act No. 7638, otherwise known as the Department of Energy Act of 1992. 
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Subsequently, tlle powers and functions of the Energy Industry Administration Bureau, which 
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includes the formulation and implementation of policies, programs and regulations on the 
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downstream oil industry, including me transportation of petroleum crude oils, products and by-
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products, were transferred to the Oil Industry Administration Bureau under Adminis trative Order 
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No. 38 issued on 23 August 2002. Pursuant to Section 44 of Republic Act No. 9136, otherwise 
24 
known as the "Electric Power Industry Reform Act of 2011", the non-price regulatory functjons of 
25 
the Energy Regulatory Board were transferred to the Energy Regulatory Commission. 
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Section 39. Non-retroactivity, Repealing Clause. The proviSIOns of Republic Act No. 387, 
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otherwise known as the "Petroleum Act of 1949", as amended and tlle provisions of all foregoing 
29 
precursor laws, and such other laws, acts, executive orders, rules and regulations and ol'her Issuances 
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inconsistent with this Act are hereby repealed or modified accordingly. 
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Section 40. 
Transitory Provision. 
Pipeline Operators or Grantees of Petroleum Pipeline 
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Concessions which have been constructed and have commenced capration prior to the date of 
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effectivity of this Act shall continue to operate under their existing authorities. 
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Nothing in this Act shall be deemed to revoke or otherwise modify any of the powers and functions 
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of the Director of Mines and the Secretary of Agriculture and Natural Resources and its successors 
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and assigns under the Petroleum Act of 1949, as amended, any existing Concession granted under 
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the Petroleum Act of 1949, as amended, or any administrative or regulatory permit or conceSSion, 
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which concession certificate or franchise shall be allowed to its full term but may not be renewed 
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except pursuant to tlle provisions of tllis Act. 
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Section 41. Effectivity. This Act shall take effect fifteen (15) days upon its publication in the 
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Official Gazette or in at least two (2) newspapers of general circulation. 
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APPROVED,