EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
Jennie
of tlK
20 SEP-8 P4 51
SENATE 
S.B. No.
RECEI. DP-
Introduced by SEN. WIN GATCHALIAN
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
EXPLANATORY NOTE
The start of commercial operations of the Malampaya-Camago wells in 1998 ushered 
in the beginning of the Philippine natural gas industry culminating with the 
Malampaya gas to power project producing its first gas in 2001. Since then, the 
domestic natural gas industry has provided Filipinos with locally sourced energy. 
Based on 2019 data from the Department of Energy (DOE), natural gas remains the 
second biggest source of electric power in the island of Luzon, accounting for 29.3% 
of its gross power generation.1 More than 20 years since Malampaya's declaration of 
commerciality, there is now a looming uncertainty as its production is expected to 
significantly decline starting 2024.2
In anticipation of the nearing depletion of gas output from Malampaya,3 the absence 
of a replacement Indigenous source,4 and the importance of diversifying the
1 Coal is the biggest source of power for the island accounting for 53.2% of gross generation. Page 13. Department of Energy 
2019 Power Situation Report.
1 Malampaya's gas production seen falling to a third by 2024. Manila Standard. 26 April 2018. Available at 
https://manilastandard.net/business/power-technology/264185/malampaya-s-gas-production-seen-falling-to-a-third-by- 
2024.html. Accessed on 2 iune 2020.
3 Page 7. Transcript of Stenographic Notes. Senate Committee on Energy hearing held on 26 April 2018.
* Page 28. Transcript of Stenographic Notes. Senate Committee on Energy hearing held on 18 June 2018.


country's energy sources to ensure energy security,5 the DOE promulgated 
Department Circular No. DC 2017-11-00126 to regulate the importation, trading, and 
supply of natural gas in the country. However, the DOE's issuance needs a 
complementary law to cover all aspects of the midstream natural gas industry, which 
includes transportation, transmission, storage, and marketing of natural gas, in its 
original or liquefied form. In view of the foregoing, and owing to the intricacy of the 
midstream natural gas industry, comprehensive legislation is needed to fill in the 
gaps and strengthen existing bridge policies in order to unlock the potential of 
natural gas as a vital source of energy for the country.
This proposed measure has three main characteristics to develop the country's 
midstream natural gas industry: First, it allows private sector participation across the 
entire value chain given the complex nature of the investment; Second, it provides 
flexibility for the government to adapt to evolving market conditions considering the 
nascency of the industry which has the potential to grow into a mature market; and 
Third, it ensures protection of consumers' interest through a framework that 
encourages transparency and competition, and disincentivizes anticompetitive 
behavior.
As such, the immediate passage of this bill is sought.
lATCHAtlAN
5 LNG Dash. Business Mirror. 4 January 2020. Avaiiabie at: https://businessmirror.com.ph/2020/01/04/ing-dash/. Accessed on 
2 June 2020.
6 Ruies and Reguiations Governing the Phiiippine Downstream Naturai Gas Industry. (2017).


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
SENATE
S.B. No.
1819
&nir.u-
of tlje
20 SEP-8 P4S1
RECEi'-' D'”-
Introduced by SEN. WIN GATCHALIAN
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 energy 
sources to supply the various sectors of the economy;
(b) Promote the role of natural gas as an additional energy source, a 
complementary fuel source to variable renewable energy, and a more 
environmentally-friendly fossil fuel by creating a legal framework that would


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govern the promotion and development of the natural gas industry in the
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country;
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(c) Encourage the inflow of private capital in the development of the midstream
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natural gas industry by fostering an open and fair competitive market;
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(d) Ensure a safe, secure, reliable, competitive, and environmentally responsible
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operation of the midstream natural gas value chain; and
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(e) Protect consumers by mandating transparent and competitive rates, fees,
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and charges.
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SECTION 3. Scope and Application. - This Act shall apply to the midstream
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natural gas industry specifically the aggregation, supply, importation, receipt,
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unloading, loading, processing, storage, regasification, transmission, and
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transportation of natural gas, in its original or liquified form, from local or foreign
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sources, and the systems and facilities utilized for such.
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SECTION 4. Definition of Terms. - For purposes of this Act, the following terms
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shall be defined as stated below:
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(a) Affiliate refers to any natural or juridical person who, alone or together with
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other natural or juridical persons, directly or indirectly, through one or more
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intermediaries, controls, is controlled by, or is under common control by the
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owner or operator of a liquefied natural gas terminal or natural gas
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transmission system. It includes a subsidiary company, a parent company,
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and the subsidiaries, directly or indirectly, of the owner or operator of an
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LNG terminal, or a natural gas transmission utility;
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(b) Ancillary services refer to all services necessary to support the transmission
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of natural gas from resources to end users, while maintaining reliable
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operation of the transmission system in accordance with good utility practice
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and the Natural Gas Transmission Code to be promulgated in accordance
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with this Act. It shall include load balancing and blending and injection of
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inert gases;


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(c) Anticompetitive behavior refers to anticompetitive pricing, output fixing, and
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any concerted practices or agreements by persons or association of persons
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that restricts, prevents, or distorts competition;
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(d) Capacity refers to the maximum flow, expressed in normai cubic meters per
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time unit or in energy unit per time;
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(e) Controi refers to the power to direct or cause the direction of the
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management policies of a corporation by contract, agency, or otherwise;
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(f) End user refers to any naturai or juridical person requiring the supply of
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natural gas, in its original or liquefied form, for resale or its own use. It
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includes power generation plants, industrial and commercial establishments,
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ecozones, marine vessels and motor vehicles;
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(g) Investment Priorities Pian (IPP) refers to the annual over-all plan prepared
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by the Board of Investments (BOI) under Article 26 of Executive Order No.
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226, otherwise known as the Omnibus Investments Code of 1987;
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(h) Importation refers to the act of bringing natural gas, in its original or
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liquefied form, into the Philippines from foreign sources;
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(i) Gas aggregator refers to any natural or juridical person which avails of the
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services of liquefied natural gas terminals and natural gas transmission
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systems to engage in the activity of pooling together separate demands for
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natural gas from end users and supplying them with natural gas from one or
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more sources;
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(j) Liquefied naturai gas (LNG) refers to natural gas which has been cooled to a
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cryogenic temperature, converting it to a liquid state;
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(k) LNG terminairefers to all facilities located onshore or offshore, that are used
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to import, receive, unload, load, process, store, regasify, transmit, or
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transport natural gas, in its original or liquefied form, from local or foreign
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sources. It shall include berthing ports, unloading and loading arms, line
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packs, own use pipelines and facilities, regasification facilities, and storage
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tanks, among others, but excludes marine vessels used to deliver natural
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gas, in Its original or liquefied form, to such terminal;
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(I) Midstream natural gas industry refers to the transportation, transmission,
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storage, and marketing of natural gas, in its original or liquefied form. It


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Utilizes, among others, marine vessels to deliver natural gas to LNG 
terminals, storage facilities, and natural gas transmission systems;
(m) 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 Natural Gas Transmission 
Development Plans of natural gas transmission utilities, and the Natural Gas 
Transmission System Operator when applicable, 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;
(n) 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 
complex sulfur compounds and water, carbon dioxide, and hydrogen sulfide 
as well as non-conventional gas including gas from bituminous shale;
(o) Natural gas Industry participant refers to the supplier, importer, or 
aggregator of natural gas; users, owners, or operators of LNG terminals; 
users of natural gas transmission systems and natural gas transmission 
utilities; and users, owners, or operators of authorized lorries and other 
specially equipped motor vehicles, ships, and marine vessels utilized to 
transport natural gas;
(p) Natural Gas Sales Purchase Agreement refers to a contract for the supply of 
natural gas, in its original or liquefied form;
(q) Natural Gas Transmission Code refers to the compilation of rules, 
procedures, requirements, regulations, and minimum technical performance 
standards governing the safe and reliable operation, maintenance, 
development, decommissioning, and abandonment of all natural gas 
transmission systems in the country. It also defines and establishes the 
relationship of transmission systems with facilities and installations of other 
natural gas industry participants and end users, if applicable;


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(r) 
Natural Gas Transmission Development Plan refers to the plan of each 
natural gas transmission utility, or the comprehensive plan of the Natural 
Gas Transmission System Operator when applicable, for managing the 
country's transmission system through efficient planning for its location, 
construction, improvement, expansion, operation, rehabilitation, repair, and 
maintenance;
(s) 
Natural gas transmission system refers to a network containing pipelines 
and other related facilities, which convey natural gas, in its original or 
liquefied form, from an LNG terminal or domestic natural gas supply to a 
natural gas industry participant or an end user, if applicable;
(t) 
Natural gas transmission fee refers to the fee paid by natural gas industry 
participants, or the end user if applicable, for the use of a natural gas 
transmission system;
(u) Natural Gas Transmission System Operator (NGTSO) refers to a natural or 
juridical person responsible for operating, maintaining, and developing the 
interconnected natural gas transmission system, ensuring the continuous 
and reliable delivery of gas to natural gas industry participants and end 
users, and securing the long-term ability of the system to meet demand for 
the transmission of gas;
(v) 
NGTSO fee refers to the fee paid by natural gas industry participants, or the 
end user if applicable, to the NGTSO for its services in operating and 
managing the interconnected natural gas transmission system;
(w) Natural gas transmission utility refers to a natural or juridical person who 
has a franchise granted by law to construct and operate a natural gas 
transmission system within a specified area;
(x) 
Negotiated third party access (nTPA) refers to a contractual arrangement 
between an own use LNG terminal permit holder or an own use natural gas 
transmission system permit holder, and a third party to allow the latter use 
and access of a specific capacity covered by the own use permit for a fee 
negotiated between the two entities;
(y) 
Own use LNG terminal permit holder refers to an LNG terminal whose owner 
or operator has been issued an own use permit;


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(z) Own use natural gas transmission system permit holder refers to a natural
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gas transmission utility which has been issued an own use permit;
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(aa) Own use permit refers to an authorization issued by DOE in the case of the
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owner and operator of an LNG terminal, and ERC In the case of a natural
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gas transmission utility, to exclusively use or allow an affiliated party to use
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a specific capacity of the LNG terminal or natural gas transmission system
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for a specified period of time;
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(bb) Permit refers to an authorization issued by the DOE or ERC, whichever is
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applicable, for the supply or importation of natural gas, or the construction,
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operation, utilization, and maintenance of an LNG terminal or natural gas
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transmission system for a specified period of time;
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(cc) Permit holder refers to a natural or juridical person who is granted a permit
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by the DOE to engage In the supply or importation of natural gas, or
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construction, operation, utilization, and maintenance of an LNG terminal or
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natural gas transmission system for a specified period of time;
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(dd) Regulated third party access (rTPA) permit refers to an authorization issued
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by the DOE in the case of the owner and operator of an LNG terminal, and
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ERC in the case of a natural gas transmission utility, to offer to the public,
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the non-discriminatory use and access of a specific capacity of the LNG
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terminal or natural gas transmission system for a fee for a specified period
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of time;
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(ee) rTPA LNG terminal permit holder refers to an LNG terminal whose owner or
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operator has an rTPA permit;
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(ff) rTPA natural gas transmission system permit holder refers to a natural gas
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transmission utility which has been issued an rTPA permit;
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(99) Terminal fee refers to the rates, charges, and other similar considerations
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imposed upon third parties in exchange for the use of and other services
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rendered by an rTPA LNG terminal permit holder;
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(hh) Third party refers to a natural gas industry participant or end user who
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avails of the services of an LNG terminal or natural gas transmission system
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and is not an affiliate of its owner or operator;


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(ii) Third party access refers to a contractual arrangement between the rTPA
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LNG terminal permit holder or rTPA natural gas transmission system permit
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holder, and a third party to allow the latter transparent and non-
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discriminatory utilization and access of the capacity available to the public of
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the rTPA LNG terminal permit holder or the rTPA natural gas transmission
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system permit hoider, whichever is appiicable;
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(jj) Transmission refers to the conveyance of naturai gas through a naturai gas
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transmission system;
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(kk) Suppiier refers to any naturai or juridicai person authorized by the DOE to
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engage in the business of suppiy of natural gas as defined in this Act; and
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(il) Suppiy refers to the trade of indigenous or imported naturai gas, in its
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originai or iiquefied form, and its subsequent sale to natural gas industry
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participants, if appiicabie, and end-users.
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CHAPTER II
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POWERS AND RESPONSIBILITIES OF GOVERNMENT AGENCIES
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SECTION 5. Powers and Responsibilities of the Department of Energy
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(DOE). - In addition to its functions under Republic Act No. 7638, otherwise known
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as the Department of Energy Act of 1992, the DOE shail be the iead implementing
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agency for this Act. Towards this end, it shaii:
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(a) Supervise and monitor the deveiopment of the midstream naturai gas
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industry;
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(b) Prepare a Midstream Natural Gas Industry Development Plan within one (1)
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year from the effectivity of this Act, upon consuitation with pubiic and
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private stakeholders, which shaii be integrated into the Philippine Energy
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Pian, and shaii be reviewed and updated annuaily;
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(c) Promulgate, within six (6) months from the effectivity of this Act's
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implementing ruies and reguiations, and determine compiiance with the
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health, safety, security, and environmentai standards of the foliowing, in
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accordance with internationaily accepted standards of the naturai gas
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industry and together with the reievant government agencies:


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(i) 
Natural gas, in its originai or iiquefied form, and
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(ii) 
Fadiity instaliation, system of operation, decommissioning, and
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abandonment of aii LNG terminais and naturai gas transmission
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systems;
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(d) Convene, within one (1) month from the effectivity of this Act, a technicai
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working group comprised of reievant government agencies to include the
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Department of Environment and Natural Resources, Department of Health,
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Department of Trade and Industry, Maritime Industry Authority, and
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Department of Transportation to ensure consistent and streamlined
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standards and regulations in the midstream natural gas industry;
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(e) Evaluate and act on applications for the siting, construction, operation,
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maintenance, modification, rehabilitation, expansion, decommissioning, and
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abandonment of all LNG terminals and natural gas transmission systems;
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(f) Issue permits for the supply, aggregation. Importation, transportation,
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transmission of natural gas, in its original or liquefied form in accordance
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with Sections 5(c) and 5(e) hereto: Provided, That in the case of
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transportation, the permit shall be issued together with the Maritime
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Industry Authority pursuant to Section 10 of this Act, and the Department of
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Transportation in accordance with Section 11 hereto;
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(g) Issue own use and rTPA permits to owners and operators of LNG terminals;
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(h) Issue a written approval on the assignment or transfer of interest on any
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permits Issued, after a finding that the assignee or transferee has met all
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the legal, technical, and financial qualifications and has committed itself to
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assume all existing obligations of the permit holder, and such assignment or
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transfer is in accordance with existing laws, rules, and regulations: Provided,
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That permits requiring the prior issuance of a legislative franchise shall not
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be subject to assignment or transfer of interest;
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(i) Ensure compliance with the publication and unbundling of the terminal fee
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imposed by an rTPA LNG terminal permit holder in accordance with Section
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25 of this Act;


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(j) Review and approve the Natural Gas Transmission Development Plans of
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owners and operators of natural gas transmission systems, and the NGTSO
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when applicable, and integrate the same into the Philippine Energy Plan;
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(k) Determine the necessity of and then direct the interconnection of natural
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gas transmission systems based on the Philippine Energy Plan, Midstream
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Natural Gas Development Plan, and the Natural Gas Transmission
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Development Plans, and upon consultation with stakeholders;
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(I) Determine the qualifications of and procedure for establishment or selection
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of an NGTSO taking into consideration Section 24 of this Act;
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(m) Establish or select an NGTSO upon the interconnection of natural gas
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transmission systems;
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(n) Require from natural gas industry participants the submission of the
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following subject to Section 32 of this Act:
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(i) Regular reports on the compliance with health, safety, security, and
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environmental standards, and activities in relation thereto,
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(ii) All contracts entered into. Including Natural Gas Sales Purchase
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Agreements, and regular reports on actions and activities relative to these
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contracts: Provided, That in the case of natural gas transmission utilities and
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the NGTSO, the contracts and regular reports shall be submitted to the ERC
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pursuant to Section 6(c) hereto,
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(iii) Mode of selection of third parties who shall utilize the capacity available
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under an rTPA permits pursuant to Section 18(b) of this Act and reports on
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selection processes undertaken, and
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(iv) Other documents, information, and data as may be necessary in the
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exercise of its functions to achieve the overall objectives of this Act.
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(o) Investigate, motu proprio or upon complaint, any failure to comply with this
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Act, its rules and regulations, and any issuance promulgated pursuant to
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DOE'S powers under this Act;
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(p) Review, and suspend or revoke, after due notice and hearing, permits
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issued, after a finding of non-compliance with this Act, its Implementing
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rules and regulations, and related issuances promulgated pursuant to DOE's
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powers under this Act;


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(q) Initiate actions against anticompetitive behavior of an rTPA LNG terminai
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permit hoider and rTPA naturai gas transmission system permit holder, and
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against violations of the provisions of this Act and other applicable laws,
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rules, and regulations before the ERC, Philippine Competition Commission
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(PCC), other quasi-judicial agencies, or the courts;
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(r) Initiate actions against the NGTSO for failure to comply with its functions as
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provided under Section 24 of this Act, and issuances of the DOE and ERC,
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before the ERC, other quasi-judicial agencies, or the courts; and
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(s) Perform all other acts that are analogous to the aforementioned and in
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furtherance of the Implementation of this Act.
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SECTION 6. Powers and Responsibilities of the Energy Regulatory
13 
Commission (ERC). - In addition to its functions under Republic Act No. 9136,
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otherwise known as the Electric Power Industry Reform Act of 2001, the ERC shall
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have the authority to:
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(a) Promulgate the the Natural Gas Transmission Code within one (1) year from
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this Act's effectivity, which shall be reviewed and updated every three (3)
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years;
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(b) Issue own use and rTPA permits to natural gas transmission utilities;
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(c) Require from natural gas transmission utilities, and the NGTSO when
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applicable, the submission of the following subject to Section 32 of this Act:
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(i) All contracts entered into, and regular reports on actions and activities
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relative to these contracts,
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(ii) Preparations for, conduct of, and results arising from various competitive
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selection processes undertaken by rTPA natural gas transmission system
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permit holders, to include the natural gas transmission fee and its
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determination, and
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(Hi) Other documents, information, and data as may be necessary in the
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exercise of its functions to achieve the overall objectives of this Act;
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(d) Investigate, motu proprio or upon complaint, any failure of natural gas
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transmission utilities to comply with the Natural Gas Transmission Code, own
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use permit, rTPA permit, or any other issuance promuigated pursuant to
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ERC's powers under this Act;
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(e) Review, penalize, suspend, or revoke, after due notice and hearing, permits
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issued to natural gas transmission systems, after a finding of non-compliance
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with the Natural Gas Transmission Code, own use permit, rTPA permit, or any
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other issuance promulgated pursuant to ERC's powers under this Act:
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Provided, That due notice and hearing shall be required before any order of
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suspension or revocation;
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(f) Ensure compliance with the publication and unbundling of the terminal fee
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imposed by owners and operators of natural gas transmission systems, and
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the NGTSO when applicable, in accordance with Section 24 of this Act;
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(g) Determine, set, and regularly review the following:
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(i) Reserve price for the natural gas transmission fee of rTPA natural gas
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transmission system permit holders, and
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(ii) NGTSO fee of the NGTSO;
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(h) Review regularly the performance of each rTPA natural gas transmission
17 
system permit holder, including the quality of its service to third parties;
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(i) Upon the establishment of the NGTSO, regularly review its performance
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including the quality of its service and compliance with its powers 
and
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functions pursuant to Section 24 of this Act, rules, regulations, and issuances
21 
of the DOE and ERC;
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(j) Exercise primary jurisdiction over disputes that may arise from rules and
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regulations issued in the exercise of its functions in order to achieve the
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overall objectives of this Act;
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(k) Exercise exclusive jurisdiction over all matters pertaining to rate setting in this
26 
Act taking into consideration the policy of full recovery of prudent and
27 
reasonable costs with a reasonable return on rate base; and
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(I) Perform ail other acts that are analogous to the foregoing and in furtherance
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of the implementation of this Act.
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SECTION 7. Powers and Responsibilities of the Department of
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Environment and Natural Resources (DENR). - In addition to its functions
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under Executive Order No. 192, otherwise known as the Reorganization Act of the 
Department of Environment and Natural Resources, the DENR, together with the 
DOE, shall determine and monitor compliance with the environmental standards for 
the location, construction, improvement, expansion, operation, rehabilitation, repair, 
maintenance, decommissioning, and abandonment of LNG terminals, natural gas 
transmission systems, and all related equipment and facilities.
SECTION 8. Powers and Responsibilities of the Department of Health 
(DOH). - In addition to its functions under Executive Order No. 317, Series of 1941, 
entitled Organizing the Department of Health and Public Welfare, as amended, the 
DOH, together with the DOE, shall determine and monitor compliance with the 
health standards for the location, construction. Improvement, expansion, operation, 
rehabilitation, repair, maintenance, decommissioning, and abandonment of LNG 
terminals, natural gas transmission systems, and all related equipment and facilities.
SECTION 9. Powers and Responsibilities of the Department of Trade and 
Industry - Bureau of Philippine Standards (DTI-BPS). - In addition to its 
functions under Republic Act No. 4109, otherwise known as An Act to Convert the 
Division of Standards Under the Bureau of Commerce into a Bureau of Standards, to 
Provide for the Standardization and/or Inspection of Products and Imports of the 
Philippines and for Other Purposes, the DTI-BPS, together with the DOE, shall 
determine, develop, formulate, promulgate, and revise, the Philippine National 
Standards for natural gas, in its original or liquefied form, LNG terminals, natural gas 
transmission systems, and all related equipment and facilities.
SECTION 10. Powers and Responsibilities of the Maritime Industry 
Authority (MARINA). - In addition to its functions under Presidential Decree No. 
474 series of 1974, otherwise known as Providing for the Reorganization of Maritime 
Functions in the Philippines, Creating the Maritime Industry Authority, and For Other 
Purposes, as amended, the MARINA, together with the DOE, shall regulate ships and 
marine vessels used to import, receive, unload, load, transport, process, or store
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natural gas, in its original or liquefied form, including those utilized as off-shore LNG 
terminals.
SECTION 11. Powers and Responsibilities of the Department of 
Transportation (DOTr). - In addition to its functions under Executive Order No. 
125, series of 1987 otherwise known as the Reorganization Act of the Ministry of 
Transportation and Communications, as amended, the DOTr, in coordination with 
the DOE, shail issue and monitor compliance with regulations governing the 
transport of natural gas. In its original state or liquefied form, through authorized 
lorries or specially equipped motor vehicles.
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 
jurisdiction over any anticompetitive behavior of naturai gas industry participants.
CHAPTER III
NATURAL GAS INDUSTRY PARTICIPANTS
SECTION 13. Responsibilities of Natural Gas Industry Participants. - All
natural gas industry participants shall:
(a) Adhere to all health, safety, security, and environmental standards and all 
Issuances promulgated pursuant to Chapter II of this Act;
(b) Comply with all reportorial requirements and submissions pursuant to 
Sections 5(n) and 6(c) hereof, whichever is applicable;
(c) Unbundle their respective fees, if applicable, pursuant to Sections 5(i), 6(f), 
and 25 of this Act; and
(d) Not engage in any anticompetitive behavior, or any act that curtails market 
competition or is detrimental to consumers.
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SECTION 14. Responsibilities of Natural Gas Transmission Utilities. - In
addition to the responsibiiities under Section 13 hereof, ali naturai gas transmission 
utiiities shall:
(a) Submit its Natural Gas Transmission Development Plan to DOE for review 
and approval pursuant to Section 5(j) of this Act prior to the establishment or 
selection of an NGTSO;
(b) When applicable, submits its Natural Gas Transmission Development Plan to 
the NGTSO pursuant to Section 24(g) hereof; and
(c) When applicable, inform and coordinate with the NGTSO for the construction, 
maintenance, modification, rehabilitation, expansion, decommissioning, and 
abandonment of any part of the natural gas transmission system to be 
undertaken in accordance with Its submitted National Gas Transmission 
Development Plan.
CHAPTER IV 
TERMINALS
SECTION 15. Importation and Receipt of Natural Gas through LNG 
Terminals. - Natural gas, in its original or liquefied form, shall only be received, 
unloaded, loaded, processed, stored, and regasified in, and then transmitted, 
transported, and conveyed from duly-authorized LNG terminals.
SECTION 16. Use and Access of LNG Terminals. - 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 for both permits and 
simultaneously perform the functions of an own use LNG terminal permit holder 
pursuant to Section 17 of this Act, and an rTPA LNG terminal permit holder pursuant 
to Section 18 of this Act, to the extent of the capacity allowed by and during the 
length of the time specified in each type of permit.
SECTION 17. Own Use LNG Terminal. - An own use LNG terminal permit holder 
shall:
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(a) Exclusively utilize the capacity aiiowed by and during the length of time 
specified in the permit, and may ailow its affiiiates to do so the same;
(b) Not enter into an nTPA or any simiiar arrangement to the extent of the 
capacity aiiowed and during the length of time specified in the permit;
(c) Not grant use and access of its facilities to third parties through an nTPA or 
any similar arrangement to the extent of the capacity aiiowed and during the 
length of time specified in the permit; and
(d) Compiy with all reportorlal requirements pursuant to Section 5(n) of this Act.
SECTION 18. Regulated Third Party Access LNG Terminal. - The issuance of 
an rTPA permit to an owner and operator of an LNG terminal shall take into 
consideration the capacity and utiiization of the LNG terminal, current and future end 
users, existing and future market conditions, and other reievant information with the 
end in view of enabling competition in the natural gas industry. The use and access 
of the capacity covered by an rTPA permit shail be open to aii naturai gas industry 
participants for a fee. An rTPA LNG terminal permit holder shall:
(a) Publicly disclose the capacity available to third parties;
(b) Determine the mode of selection of third parties who shaii utilize the capacity 
available which may inciude negotiated contracts;
(c) Provide non-discriminatory use and access to third parties, to the extent of 
the capacity aiiowed by and during the iength of time specified in its permit;
(d) Not give any undue preference or advantage to any third party, whether in 
rates, terms, conditions, or special privileges;
(e) Comply vyith all reportorlal requirements pursuant to Section 5(n) of this Act; 
and
(f) Publish and unbundle Its terminal fee pursuant to Section 25 of this Act.
CHAPTER IV
TRANSPORT AND TRANSMISSION OF NATURAL GAS
SECTION 19. Transport of Natural Gas. - Natural gas, in its original or liquefied- 
form, may be transported within the country through authorized lorries and other
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specially equipped motor vehicles, ships, and vessels In accordance with Sections 5, 
10, and 11 of this Act.
SECTION 20. Transmission of Natural Gas. - Natural gas may be conveyed 
through natural gas transmission systems. The ownership and operation of a natural 
gas transmission system shall be considered a public utility and shall require a 
legislative franchise. All natural gas transmission utilities shall apply and acquire from 
the ERC an own use permit, an rTPA permit, or a combination of both pursuant to 
Sections 21, 22, and 23 of this Act.
SECTION 21. Use and Access of Natural Gas Transmission Systems. - The
ERC shall issue own use and rTPA permits to natural gas transmission utilities. The 
natural gas transmission utility shall have the option to apply for both permits and 
simultaneously perform the functions of an own use natural gas transmission system 
permit holder pursuant to Section 22 of this Act, and an rTPA natural gas 
transmission system permit holder pursuant to Section 23 of this Act, to the extent 
of the capacity allowed and during the length of the time specified under each type 
of permit.
SECTION 22. Own Use Natural Gas Transmission Systems. - An own use
natural gas transmission system permit holder shall:
(a) Exclusively utilize the capacity allowed and during the length of time specified 
in the permit, and may allow its affiliates to do the same: Provided, That the 
fees charged, if any, to affiliates, shall not be subject to the reserve price set 
by the ERC pursuant to Section 6(g) of this Act;
(b) Not enter into an nTPA or any similar arrangement to the extent of the 
capacity allowed and during the length of time specified in the permit;
(c) Not grant use and access of its facilities to third parties through an nTPA or 
any similar arrangement to the extent of the capacity allowed and during the 
length of time specified in the permit; and
(d) Comply with all reportorial requirements pursuant to Section 6(c) of this Act.
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SECTION 23. rTPA Natural Gas Transmission Systems. -The issuance of an
2 
rTPA permit to a naturai gas transmission utiiity shaii take into consideration, the
3 
capacity and utiiization of the naturai gas transmission system, current and future
4 
end users, existing and future market conditions, and other reievant information
5 
with the end in view of enabiing competition in the naturai gas industry.
6 
The use and access of the capacity covered by an rTPA permit shaii be open
7 
to aii naturai gas industry participants for a fee, subject to the reserve price of the
8 
ERC in accordance with Section 6(g) of this Act. The naturai gas transmission fee
9 
shaii consist of amounts used to defray the costs of pianning, constructing,
10 
improving, expanding, maintaining, and abandoning the system, as weii as the cost
11 
of operating and performing the functions of a naturai gas transmission system
12 
operator. An rTPA naturai gas transmission system permit hoider shaii:
13 
(a) Pubiiciy disciose the capacity avaiiabie for third parties;
14 
(b) Conduct a competitive seiection process in awarding the capacity avaiiabie for
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third parties;
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(c) Ensure that the winning bid does not go beyond the reserve price determined
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by ERC pursuant to Section 6(g) of this Act;
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(d) Provide non-discriminatory use and access to third parties, to the extent of
19 
the capacity aiiowed by its permit;
20 
(e) Not give any undue preference or advantage to any third party, whether in
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rates, terms, conditions, or spedai priviieges;
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(f) Compiy with aii reportoriai requirements subject to Section 6(c) of this Act;
23 
and
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(g) Pubiish and unbundie its transmission fee pursuant to Section 25 of this Act.
25
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SECTION 24. Natural Gas Transmission System Operator. - The DOE, based
27 
on the Phiiippine Energy Pian, the Midstream Naturai Gas Industry Deveiopment
28 
Pian, and the various Naturai Gas Transmission Deveiopment Pians shaii determine
29 
the necessity of and then direct the interconnection of naturai gas transmission
30 
systems pursuant to Section 5(k) of this Act. The DOE may thereafter estabiish or
31 
seiect a singie NGTSO, which shaii:
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(a) Operate and manage the interconnected natural gas transmission system in
2 
accordance with the Naturai Gas Transmission Code;
3 
(b) Operate and maintain a secure, reiiable, and efficient system for the
4 
transmission of naturai gas to natural gas industry participants and end
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users, whichever is appiicable;
6 
(c) Coordinate with natural gas transmission utilities for construction,
7 
maintenance, modification, rehabilitation, expansion, decommissioning, and
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abandonment of any part of the natural gas transmission system in
9 
accordance with their submitted Natural Gas Transmission Development
10 
Plan;
11 
(d) Provide third party access and non-discriminatory service among natural gas
12 
industry participants based on the results of the competitive selection
13 
processes of the natural gas transmission utilities, and to the extent of the
14 
capacity allowed by and during the length of time specified in the rTPA
15 
permit;
16 
(e) Furnish natural gas industry participants with sufficient information for
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efficient access to the interconnected natural gas transmission system, and
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to ensure that the transmission of natural gas may take place in a manner
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compatible with the secure and efficient operation of the interconnected
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natural gas transmission system;
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(f) Secure ancillary services necessary to support the reliable and secure flow of
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natural gas through the interconnected natural gas transmission system;
23 
(g) Regularly prepare a comprehensive Natural Gas Transmission Development
24 
Plan based on the submitted Natural Gas Transmission Development Plans of
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natural gas transmission utilities, upon consultation with public and private
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stakeholders, and submit the same for review and approval of the DOE;
27 
(h) Collect an NGTSO fee, subject to the approval of the ERC; and
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(i) Other functions and responsibilities determined by the DOE and ERC
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pursuant to Sections 5 and 6 of this Act.
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CHAPTER VI
32 
RATES, FEES, AND OTHER CHARGES
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SECTION 25. Publication and Unbundling of Fees. - rTPA LNG terminal permit 
holders, rTPA natural gas transmission system permit holders, and the NGTSO shall 
publish on their website their unbundled terminal fees, natural gas transmission 
fees, NGTSO fee respectively. Each cost component shall be segregated and 
identified separately.
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 pursuant to the provisions of this Act.
CHAPTER VII
PROHIBITED ACTS AND PENALTIES
SECTION 27. Prohibited Acts. - Without prejudice to civil and criminal liability, 
the following acts shall be prohibited:
(a) For government agencies: failing to comply with the responsibilities and within 
the timeframe, if applicable, under Chapter II of this Act on Powers and 
Responsibilities of Government Agencies;
(b) For natural gas industry participants:
(i) Siting, constructing, operating, maintaining, modifying, rehabilitating, 
expanding decommissioning, and abandoning of LNG terminals and natural 
gas transmission systems without the required permits,
(ii) 
Receiving, unloading, loading, storing, regasifying, transmitting, 
transporting, and conveying natural gas from LNG terminals without the 
required permits,
(iii) Transporting natural gas within the country through lorries, specially 
equipped motor vehicles, ships, and marine vessels without the required 
permits,
(iv) Engaging in the business of aggregation, supply, and importation of 
natural gas without the required permits.
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(v) Failing to comply with the health, safety, security, environmental, and
2 
other standards as determined by DOE, DENR, DOH, DTI-BPS, MARINA,
3 
DOTr, and other relevant government agencies,
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(vl) Failing to comply with documentary and reportorial requirements and
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submissions,
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(vii) Engaging In any anticompetitive behavior, or any act that curtails market
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competition, or is detrimental to consumers, and
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(viii) Failing to perform other duties and responsibilities determined by DOE
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and other government agencies pursuant to their powers under this Act;
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(c) For LNG terminals:
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(i) Operating as an own use LNG terminal without an own use permit,
12 
(il) Operating as an rTPA LNG terminal without an rT?A permit,
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(iii) Assigning or transferring the interest of any permits issued without a
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written approval from DOE,
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(iv) Entering into nTPA agreements or similar arrangements to the extent
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covered by an own use permit,
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(v) Allowing a third party to use the capacity covered by an rTPA permit
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through an nTPA agreement or similar arrangement;
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(vi) Utilizing or allowing an affiliated party to utilize the capacity or for the
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duration of time over and beyond the capacity or duration of time specified in
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an own use permit;
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(vii) Utilizing or allowing a third party to utilize the capacity or for the duration
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of time over and beyond the capacity or duration of time specified in an rTPA
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permit;
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(ix) Failing to publicly disclose the capacity available to third parties to the
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extent covered by an rTPA permit,
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(x) Giving any undue preference or advantage to any party to the extent
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covered by an rTPA permit,
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(xi) Failing to provide non-discriminatory use and access to third parties to
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the extent covered by an rTPA permit,
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(xii) Falling to publish and unbundle the terminal fee for rTPA LNG terminal
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permit holders, and
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(xiii) Failing to perform other duties and responsibilities determined by DOE
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and other government agencies pursuant to their powers under this Act;
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(d) For natural gas transmission utilities:
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(i) Constructing, owning, and operating, a natural gas transmission system
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without a legislative franchise,
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(ii) Operating as an own use natural gas transmission system without an own
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use permit,
8 
(iii) Operating as an rTPA natural gas transmission system without an rTPA
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permit,
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(iv) Entering into nTPA agreements or similar arrangements to the extent
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covered by an own use permit,
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(v) Allowing a third party to use the capacity covered by an rTPA permit
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through an nTPA agreement or similar arrangement;
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(vi) Utilizing or allowing an affiliated party to utilize the capacity or for the
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duration of time over and beyond the capacity or duration of time specified in
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an own use permit;
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(vii) Utilizing or allowing a third party to utilize the capacity or for the duration
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of time over and beyond the capacity or duration of time specified in an rTPA
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permit;
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(viii) Failing to undertake a competitive selection process for the capacity
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covered by an rTPA permit,
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(ix) Failing to inform and coordinate with the NGTSO for the construction,
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maintenance, modification, rehabilitation, expansion, decommissioning, 
and
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abandonment of any part of the natural gas transmission system,
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(x) Failing to publicly disclose the capacity available for third parties to the
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extent covered by an rTPA permit,
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(xi) Awarding a winning bid beyond the reserve price determined by ERC,
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(xii) Failing to provide non-discriminatory use and access to third parties to
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the extent covered by an rTPA permit,
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(xiii) Giving undue preference or advantage to any third party to the extent
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(xiv) Failing to submit the Natural Gas Transmission Development Plan to the
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DOE and the NGTSO when applicable,
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(xv) Failing to comply with the Natural Gas Transmission Code, and
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(xvi) Failing to publish and unbundle the natural gas transmission fee for rTPA
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natural gas transmission system permit holders;
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(xvii) Failing to perform other duties and responsibilities determined by DOE
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and other government agencies pursuant to their powers under this Act;
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(e) For the NGTSO:
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(i) Failing to operate and manage the interconnected natural gas transmission
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system in accordance with the Natural Gas Transmission Code,
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(ii) Failure to operate and maintain a secure, reliable, and efficient system,
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(iii) Failure to coordinate with natural gas transmission utilities for
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construction, maintenance, modification, 
rehabilitation, 
expansion,
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decommissioning, and abandonment of any part of the natural gas
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transmission system,
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(iv) Failure to provide third party access and non-discriminatory service
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among natural gas industry participants to the extent covered by the rTPA
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permits of natural gas transmission utilities,
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(v) Failing to furnish natural gas industry participants with sufficient
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Information for efficient access to the interconnected natural gas transmission
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system,
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(vi) Failure to secure ancillary services,
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(vii) Failing to submit a comprehensive Natural Gas Transmission
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Development Plan based on the submitted 
Natural Gas Transmission
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Development Plans of natural gas transmission utilities,
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(viii) Submitting a comprehensive Natural Gas Transmission Development
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Plan that is not based on the submitted 
Natural Gas Transmission
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Development Plans of natural gas transmission utilities,
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(ix) Collecting an NGTSO fee without the approval of the ERC,
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(x) Failing to publish and unbundle the NGTSO fee, and
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(xi) Failing to perform other functions and responsibilities determined by the
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DOE and ERC pursuant to their powers under this Act.
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SECTION 28. Penalties. - Without prejudice to civil and criminal liability, the 
following administrative penalties shall be imposed upon any natural or juridical 
person for every prohibited act enumerated below:
(a) Section 27 (a): Fine not exceeding the equivalent of six (6) months' salary or 
suspension not exceeding one (1) year, or removal depending on the gravity of the 
offense;
(b) Section 27 (b), (c), and (d):
(i) First Offense: Fine of not less than Ten million pesos (P10,000,000) for 
every day of non-compliance, and if applicable, suspension of permits until 
the violation is corrected,
(ii) Second Offense: Fine of not less than Fifty million pesos (P50,000,000) for 
every day of non-compliance, and if applicable, suspension of permits until 
the violation is corrected, and
(iii) Third Offense: Fine of not less than One hundred million pesos 
(P100,000,000), revocation of permit, and disqualification from applying for 
future permits. 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.
CHAPTER VIII 
FINAL PROVISIONS
SECTION 29. Incentives. - LNG terminals and natural gas transmission systems, 
shall be included in the annual IPP of the BOI and shall be entitled to the incentives 
provided under Executive Order No. 226 and any other applicable law for six (6) 
years from the effectivity of this Act: Provided, That after the aforementioned 
period, the inclusion of LNG terminals and natural gas transmission systems in the 
annual IPP shall be reviewed and may be extended by the BOI: Provided further, 
That LNG terminals shall be exempt from Article 32 (1) of Executive Order No 226.
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SECTION 30. Permits and Licenses. - All government agencies Including local 
government units shail provide for a uniform and streamlined permitting process for 
the siting, construction, operation, maintenance, modification, rehabiiitation, 
expansion, decommissioning, and abandonment of LNG terminals, natural gas 
transmission systems, as weli as the supply, aggregation, importation, 
transportation, and transmission, of natural gas. In its original or liquefied form: 
Provided, That the process shali be covered by the provisions of Republic Act No. 
11234, otherwise known as the Energy Virtual One-Stop Shop Act.
SECTION 31. Public Access to Information. - The DOE, ERC, and other 
relevant government agencies shail allow public access, through its website, to all 
data and information submitted in the impiementation of this Act: Provided, That 
such access is compiiant with Section 32 of this Act.
SECTION 32. Confidentiality. - The DOE, ERC, and other relevant government 
agencies shaii not disclose any proprietary and confidential data to the public and to 
other natural gas industry participants unless prior consent of the source or owner of 
such data has been obtained by the requesting party.
SECTION 33. Establishment of Dedicated Offices. - The DOE and ERC shall 
establish dedicated offices for the effective impiementation of this Act. The 
organizational structure and staffing complement shall be determined by the DOE 
Secretary and ERC Chairperson respectiveiy, in consultation with the Department of 
Budget and Management, and in accordance with existing civii service ruies and 
regulations.
SECTION 34. Appropriations. - The amount of Seventy five miilion pesos 
(P75,000,000.00) shali be charged against the current year's appropriations of the 
DOE and the amount of Fifty miliion pesos (P50,000,000.00) shall be charged 
against the current year's appropriations of the ERC, ali for the initial Implementation 
of this Act. Thereafter, such amounts necessary for the sustainable implementation 
of this Act shail be included in the annuai General Appropriated Act.
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SECTION 35. Congressional Oversight. - The Joint Congressional Energy 
Commission (JCEC) shaii exercise oversight powers over the impiementation 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.
SECTION 36. Transitory Period.- The rights and obligations acquired under 
relevant laws and regulations issued prior to this Act shall remain effective for five 
(5) years from effectivity of this Act. Thereafter, the DOE shall ensure that all LNG 
terminals, natural gas transmission systems, specially equipped motor vehicles, 
ships, and marine vessels are compliant with the provisions of this Act: Provided, 
That natural gas transmission systems operating under an existing franchise 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, in 
consultation with the relevant government agencies and energy industry 
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.
25


All other laws, ordinances, rules, regulations and issuance or parts thereof, that are 
inconsistent with this Act, are likewise amended or repeaied accordingly.
SECTION 40. Effectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in the Offidai Gazette or one (1) newspaper of general 
circulation.
Approved,
26