Updated: Monday September 26, 2011/AlEthnien Shawwal 28, 1432/Somavara Asvina 04, 1933, at 10:17:33 PM

FINAL DRAFT

13 July 2001

SEQ CHAPTER \h \r 1 S. R. O. _______.

The Natural Gas Regulatory Authority (Licensing) Rules, 2001

In exercise of the powers conferred by section 34 of the Natural Gas Regulatory Authority Ordinance, 2000 (I of 2000), the Natural Gas Regulatory Authority, with the approval of the Federal Government, is pleased to make the following rules, namely:---

PART I

SHORT TITLE, COMMENCEMENT AND DEFINITIONS

1 Short title and commencement. —(1) These rules may be called the Natural Gas Regulatory Authority (Licensing) Rules, 2001.

(2) They shall come into force at once.

2 Definitions. — (1) In these rules, unless there is anything repugnant in the subject or context,—

(i) “application” means an application made to the Authority in accordance with the provisions of these rules for obtaining a license from the Authority;

(ii) “Authority” means the Natural Gas Regulatory Authority established under section 3 of the Ordinance;

(iii) “BTU” means British Thermal Unit;

(iv) “category of retail consumer” means a category of retail consumer designated as such by order of the Federal Government from time to time;

(v) “common carriage” means the obligation to transport, on a non-discriminatory basis, for a fee or any other basis approved by the Authority, natural gas through the pipelines of a licensee;

(vi) “communication” means the pleadings and any other correspondence with the Authority in connection with the proceedings;

(vii) “consumer” means retail consumers or wholesale consumers;

(viii) “correct meter” means a meter that registers the amount of natural gas passing through it to an accuracy of + two percent or such other accuracy as may be determined by the Authority from time to time and the Authority may determine different accuracies for different types of meters;

(ix) “distribution” means the activity of transporting natural gas through pipelines and associated facilities at a pressure which would not ordinarily be expected to exceed 300 psig or such pressure as the Authority may prescribe from time to time;

(x) “existing companies” means Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited;

(xi) “existing gas purification facilities” means the facilities at the Sui Gas Field used by the existing companies for purification on the date of commencement of the Ordinance;

(xii) “financial year” means the period beginning on the first day of July in a calendar year and ending on thirtieth day of June in the next following calendar year;

(xiii) “license” means a license granted by the Authority under the Ordinance and these rules, to undertake one or more regulated activities;

(xiv) “licensee” means the grantee or holder of a license;

(xv) “MMCF” means million cubic feet;

(xvi) “MMCFD” means million cubic feet per day ;

(xvii) “main”means a distribution line that serves as a common source of supply of natural gas for more than one service line;

(xviii) “meter” means an instrument for measuring and indicating or recording the volume of natural gas that has passed through it;

(xix) “motion” means any written or, if so permitted by the Authority, oral application in relation to any matter under these rules;

(xx) “natural gas” means hydrocarbons or mixture of hydrocarbons and other gases which at sixty degrees Fahrenheit and atmospheric pressure are in the gaseous state (including gas from gas wells, gas produced with crude oil and residue gas resulting from the processing of gas) consisting primarily of methane, together with any other substances produced with such hydrocarbons;

(xxi) “Ordinance” means the Natural Gas Regulatory Authority Ordinance, 2000 (I of 2000);

(xxii) “open access” means the non-discriminatory access, for a fee or any other basis approved by the Authority, to transmission or distribution facilities;

(xxiii) “person” includes an individual, firm, association of persons, partnership, company, trust, corporation, a government, local or other authority or any other legal entity;

(xxiv) “pipe” means any pipe or tubing used in the transportation of gas, including pipe type holders and the expression “piping” shall be construed accordingly;

(xxv) “pipeline” means all parts of those physical facilities through which natural gas moves during transmission, including pipes, valves and other appurtenances attached to pipes, compressor units, metering stations, regulated stations, delivery stations, holders and fabricated assemblies;

(xxvi) “pleadings” means the application, the replies to the application and rejoinders;

(xxvii) “prescribed period” means the period of time prescribed in these rules for the giving of a notice or directions or for the performance of any other act or acts by the Federal Government or the Authority.

(xxviii) “proceedings” means the process beginning with the filing of an application and ending when the Authority makes its final determination and includes the process of a review by the Authority of its final determination;

(xxix) “project” means transmission, distribution or sale of natural gas through a specified route or in a geographical area, where the applicant proposes to build the requisite pipelines and other infrastructure;

(xxx) “psig” means pounds per square inch gauge;

(xxxi) “public emergency” means the occurrence of any natural calamity, or an event which threatens public safety, or the sovereignty, security or integrity of Pakistan and is declared as such by the Federal Government;

(xxxii) “purification” means the purification or processing of natural gas and may include the removal of any of its constituent gases or the separation from gas of any oil or water;

(xxxiii) “register” means the record maintained by the Registrar wherein shall be entered the title and number of all applications and communications in such manner and with such details as the Authority may, from time to time, direct;

(xxxiv) “Registrar” means a person designated by the Authority to register and record the receipt of communications and applications filed with the Authority and to perform such other duties under these rules as may, from time to time, be assigned by the Authority.

(xxxv) “regulatory accounts” means accounts of the licensee maintained in such form as may be prescribed by the Authority so as to enable the Authority to obtain all relevant information as it may require in order to determine that licensee’s total revenue requirement for each financial year, to establish or vary any tariff or to exercise any other power contained in rule 4 of these rules.

(xxxvi) “regulated activity” means any of the activities of transmission, distribution or sale of natural gas by any person and the purification of natural gas by an existing company using the existing gas purification facilities but shall not include the activities of transmission or distribution of natural gas within a lease area governed by a petroleum concession agreement and undertaken by the holder of a petroleum right as defined in such an agreement;

(xxxvii) “retail consumer” means a person who purchases or receives natural gas for consumption and not for delivery or resale other than resale for vehicular use and shall include a person who owns or occupies any premises which are connected to a supply of natural gas.

(xxxviii) “sale” means the sale of natural gas to retail consumers but shall not include sale of natural gas for vehicular use and self consumption by a licensee in connection with its regulated activity and the expression “sell” shall be construed accordingly;

(xxxix) “service line” means a distribution line that transports natural gas from a main to (i) a consumer’s meter or the connection to a consumer’s piping, whichever is further downstream or (ii) the connection to a consumer’s piping if there is no consumer meter;

(xl) “transmission” means the activity of transporting natural gas through pipelines and other facilities at a pressure of not less than 300 psig or such pressure as the Authority may prescribe from time to time;

(xli) “wholesale consumer” means a person who purchases or receives natural gas for delivery or resale to others but does not include a person dealing in the sale of compressed natural gas as fuel for vehicular use.

(2) All other terms used but not defined in these rules shall have the meanings ascribed to them in the Ordinance.

PART II

LICENSING OF REGULATED ACTIVITIES

3. Regulated activities prohibited without license.-

(1) No person shall undertake any regulated activity without having obtained a license from the Authority in accordance with these rules.

4. Powers of the Authority ---

(1) The Authority shall be exclusively responsible for licensing the carrying on of regulated activities on the terms and conditions set out in these rules and such others as it may impose provided the same are not inconsistent with these rules and are connected with the regulated activities.
(2) Without prejudice to the generality of the foregoing, the Authority is empowered to,---

(i) grant, issue and renew licenses and modify, amend, suspend, review, cancel, reissue or terminate any license for the undertaking of any regulated activity and prescribe requirements to be satisfied by applicants for the grant of license;

(ii) prescribe, review, approve and regulate tariffs pertaining to regulated activities and operations of the licensees;

(iii) promote effective competition in the undertaking of regulated activities;

(iv) promote technical and operational efficiency in the carrying out of regulated activities;

(v) facilitate the provision of common carriage for the achievement of a competitive environment in regulated activities;

(vi) monitor and enforce compliance by licensees of the terms and conditions of their licenses;

(vii) protect the interests of consumers in accordance with the provisions of the Ordinance and these rules;

(viii) provide protection to consumers against the anti-competitive conduct of the licensees;

(ix) resolve complaints and other claims against licensees for contravention of the provisions of the Ordinance or these rules;

(x) resolve disputes between licensees and between licensees and consumers;

(xi) in consultation with licensees specify, administer and enforce performance, service and safety standards and other conditions for undertaking any regulated activity;

(xii) in consultation with licensees, specify, review and certify standards for the equipment and materials to be used in undertaking any regulated activity;

(xiii) in consultation with the federal government and licensees, determine for each licensee a reasonable rate of return which may be earned by that licensee in the undertaking of a regulated activity, keeping in view all the circumstances;

(xiv) prescribe a uniform form of accounts and accounting practices to be complied with by licensees;

(xv) oversee the capital expenditure to be made by licensees in connection with any regulated activity;

(xvi) in consultation with licensees, prescribe procedures and standards for investment programmes of licensees,

(xvii) prescribe fines for contravention of the provisions of the Ordinance and these rules; and

(xviii) perform any other functions or exercise such powers as may be incidental or consequential to the performance of any of its functions or theexercise of any of its powers.

(3) In exercising its functions the Authority shall, as far as practicable, look after the interests of the consumers and the licensees along with the nation as a whole.

(4) A license may be restricted by the category of regulated activity, area of operation, period of authorization and such other terms as the Authority may determine.

(5) The Authority may grant exclusive or non-exclusive licenses to carry on any regulated activity to such persons, and on such terms, in respect of such areas or between such places and for such periods, as the Authority may, in accordance with these rules, determine:
Provided that a license granted by the Authority shall be valid for a maximum period of thirty (30) years.

5. Application for a license --

(1) Any company incorporated inside or outside Pakistan may make an application with the Authority, for obtaining a license to undertake a regulated activity, by filing it with the Registrar along with such fees as may be determined by the Authority from time to time. An applicant shall be entitled to withdraw an application at any time on the condition that the applicant shall be barred from making a similar application to the Authority.

(2) An application filed under Sub-Rule (1) shall be made in the format specified in Schedule-I to these rules, clearly specifying the information required in that schedule.

(3) An application filed under Sub-Rule (1) shall be accompanied by,---

(i) attested copies of the memorandum and articles of association of the applicant;

(ii) attested copy of the applicant’s certificate of commencement of business;

(iii) attested copy of the latest yearly submission to the Registrar of Companies;

(iv) attested copy of the latest audited annual and unaudited half yearly financial statements of the applicant;

(v) attested copy of the corporate authorization allowing the submission of the application;

(vi) in the case of an applicant being a subsidiary company, the documents specified in clauses (i) to (iv) of this Sub-Rule, pertaining to its holding company;

(vii) details of the consents required under applicable laws, from persons other than the Authority, for carrying on the relevant regulated activities andthe status of such consents;

(viii) details of the technical and financial expertise and resources available for carrying on the relevant regulated activities;

(ix) details of the resources and expertise available in handling emergency situations arising out of natural calamities, accidental or criminal acts or omissions;

(x) a list of the names and business addresses of the applicant’s senior management, including without limitation, departmental heads;

(xi) if the applicant or any of its officers or directors, directly or indirectly, owns, controls, or holds ten percent or more of the voting interest in any otherperson engaged in the production, transmission, distribution, or sale of natural gas, or in any person engaged in the financing, construction, maintenance or operation of such facilities, a detailed explanation of each such relationship, including the percentage of voting interest owned, held or controlled;

(xii) a list of all other applications, petitions or filings filed by the applicant which are pending before the Authority at the time of the filing of this application andwhich directly and significantly affect this application, including an explanation of any material effect the grant or denial of those other applications, petitions orfilings will have on this application and of any material effect the grant or denial of this application will have on those other applications, petitions or filings;

(xiii) details of the following market data --

(a) an estimate of the volume of natural gas to be transmitted, distributed or sold;

(b) number and consumption details of consumers;

(d) total past (if applicable) and expected curtailments of service by the applicant;

(xiv) such other information or documentation as may be required by the Authority from time to time, including without limitation, supplementary information or documentation required by the Authority to clarify the information contained in the application.

(4) In the case of an application for a transmission license, in addition to the documents specified in Sub-Rule (3), the application shall be accompanied by ----

(i) Maps issued or certified by the Survey of Pakistan, drawn to an appropriate scale showing details of areas where the transmission facilities are or are proposed to be located and the principal geographical features of the said areas, including without limitation, details of mountains, rivers, streams, roads, buildings or construction and habitation;

(ii) details of the sources and quality of supply of natural gas including forecasts of the available quantity from such sources;

(iii) details of how the applicant proposes to meet the safety and service obligations prescribed by the Authority;

(iv) details of the capacity and estimated throughput, of the transmission facilities, per annum for ten years following the proposed grant of the license; and

(v) technical specifications of the transmission facilities (existing and proposed), including without limitation, specifications for the design, construction, operation and maintenance of the facilities.

(5) In the case of an application for a distribution or a sale license, in addition to the documents specified in Sub-Rule (3), the application shall be accompanied by ----

(i) Maps issued or certified by the Survey of Pakistan, drawn to an appropriate scale showing the territory within which the applicant wishes to distribute and sell natural gas; details of areas where the distribution facilities are or are proposed to be located giving the principal geographical features of the said areas, including without limitation, details of roads, buildings or construction and habitation; and details of proposed connections and inter-connections with the transmission and distribution facilities of other licensees;

(ii) details of the sources and quality of supply of natural gas including forecasts of the available quantity from such sources;

(iii) details of how the applicant proposes to meet the safety and service obligations prescribed by the Authority; and

(iv) technical specifications of the distribution facilities (existing and proposed) or pipelines for the sale of natural gas, as the case may be, including without limitation, specifications for the design, construction, operation and maintenance of the facilities or pipeline, as the case may be.

(6) In the case of an application for a project, in addition to the documents specified in Sub-Rule (3) and as the case may be, Sub-Rule (4) or (5), the application shall be accompanied by ---

(i) a description of the project, its purpose and cost, including conceptual engineering design, capacity, location option and preference, as well as all ancillary or related facilities that are proposed to be constructed, owned or operated by the applicant;

(ii) an outline of the anticipated timetable for construction and operation, together with dates by which critical events, including approvals required from other persons, must take place to ensure continued economic viability;

(iii) a description of any new or expanded public works, undertakings or infrastructure that will be entailed by the project, together with an estimate of the costs and necessary completion dates;

(iv) identification and preliminary assessment of any impacts by the project on the environment; proposals for reducing negative impacts and obtaining the maximum benefits from positive impacts; and the cost to the project of implementing the proposals;

(v) identification of the consumers to be served by the project; and, where the project would expand the area served by an existing licensee, a geographical description of the expanded service area;

(vi) studies or summary statements identifying the need for the project and confirming the technical, economic and financial feasibility of the project, identifying assumptions, sources of data, and alternatives considered (if applicable);

(vii) a study comparing the costs and benefits of the project and alternatives, which estimates the value of all of the costs and benefits of each option or, where not quantifiable, identifies the cost or benefit and states that it cannot be quantified;

(viii) a statement identifying any significant risks to successful completion of the project;

(ix) a statement of the revenue requirement impact of the project and the resulting effect on the tariff chargeable to consumers;

(x) a description of the applicant’s public information and consultation programme, including the names of persons consulted, as well as a summary of the issues and concerns discussed, mitigation proposals explored, decisions taken, and items to be resolved;

(xi) conformed copy of each contract, letter of intent or other agreement for the transmission, distribution or sale of natural gas proposed by the application, indicating the rate to be charged and if no agreements have been made, indicating the basis for assuming that contracts will be executed and that service will be rendered under the terms contemplated in the application;

(xii) a full description of all facilities, other than those covered by the application, necessary to provide the service proposed in the application, the estimated cost of such facilities, by whom they are to be constructed, and evidence of economic feasibility;

(xiii) a copy of each market survey made within the past three years for such markets as are to receive new or increased service from the project;

(xiv) a statement showing the rights of the applicant or any other person to transmit, distribute or sell natural gas in each area covered by the project;

(xv) a statement of the applicant’s anticipated cash flow, including provision during the period of construction and the first three full years of operation of the project for interest requirements, dividends, and debt/capital retirements;

(xvi) a comparative pro forma balance sheets and income statements for the period of construction and each of the first three full years of operation, giving effect to the proposed construction and proposed financing of the project;

(xvii) any additional data and information upon which the applicant proposes to rely in showing the adequacy and availability to it of resources for financing the project;

(xviii) a detailed estimate of total capital cost of the project, showing the cost of construction by operating units such as compressor stations, main pipelines, laterals, measuring and regulating stations, and separately stating the cost of rights-of-way, damages, surveys, materials, labour, engineering and inspection, administrative overheads, fees for legal and other services, allowance for funds used during construction, and contingencies; including a brief statement indicating the source of information used as the basis for the above estimate;

(xix) data on preliminary bids, if any, for the project and recent experienced cost data for facilities of similar character; and

(xx) a concise statement setting forth arrangements for supervision, management, engineering, accounting, legal, or other similar services to be rendered in connection with the construction or operation of the project, if not to be performed by employees of the applicant, including reference to any existing or contemplated agreements therefor, together with:

a) a statement showing the affiliation between the applicant and any parties to such agreements or arrangements;

b) conformed copies of all construction, engineering, management, and other similar service agreements or contracts in any way operative with respect to construction, operation, or financing of the project.

(7) Existing companies may seek exemption from the Authority from the provision of any part of the information or documentation required by Sub-Rules (3), (4) or (5).

(8) The Registrar shall examine the contents of the application in order to satisfy himself of the conformity thereof with the provisions of Sub-Rules (2), (3) and (4) or (5) and if applicable (6) as the case may be—

where the application is found to be in conformity with the requirements of the Sub-Rules mentioned above, shall accept the application and endorse thereon a stamp acknowledging the filing along with the number given thereto in the register; or

where the application is found not to be in conformity with the requirements of the Sub-Rules mentioned above, shall as soon as may be but no later than seven days of filing thereof, return the application to the applicant with directions to amend and re-file the application in accordance with the provisions of Sub-Rules (2), (3) and (4) or (5) and if applicable (6) as the case may be:

Provided that, where an application is re-filed by the applicant, and the registrar is not satisfied of the conformity thereof with the requirements of Sub-Rules (2), (3) and (4) or (5) and if applicable (6) as the case may be, the registrar shall place the application before the Authority for directions which shall be made by the Authority no later than seven days of the date of re-filing thereof by the applicant. The Authority shall not reject an application on the grounds of any defect therein without giving the applicant an opportunity of rectifying the defect within the time specified for the purpose by the Authority.

(9) Any communications filed by a person in connection with the proceedings shall contain the name and address of the communicator, the subject-matter of the communication and the title of the proceedings, and shall be filed with the Registrar who shall acknowledge receipt thereof either on a copy of the communication or through a written receipt in a format to be determined by the Authority and shall also endorse on the filing receipt the number of the application in connection with which the communication is filed and the number assigned to the communication on the register.

(10) All applications shall be deemed to be filed on the date of acceptance thereof by the Registrar, and where re-filed in accordance with the provisions of Sub-Rule (7), on the date the Registrar or the Authority, as the case may be, accepts the filing thereof. A communication shall be deemed to be filed on the date on which it is filed with the Registrar.

(11) The contents of any communication shall pertain to a single application in respect of which it is filed.

(12) An application or communication shall be signed by the communicator or by one or more of the applicant’s or communicator’s authorized representatives in their individual names on behalf of the applicant or the communicator.

(13) Any application or communication, wherein any statement of fact or opinion is made by the applicant or the communicator, shall be verified by an affidavit, drawn up in the first person stating the full name, age, occupation and address of the deponent and the capacity in which he is signing, indicating that the statement made therein is true to the best of the knowledge of the deponent, information received by the deponent and belief of the deponent, and shall be signed and sworn before a person lawfully authorized to take and receive affidavits, provided that, a communication filed during the course of a hearing may be affirmed in person before the Authority by the person filing the same. Where any statement in an affidavit is stated to be true according to the information received by the deponent, the affidavit shall also disclose the source of such information.

(14) An application or communication shall be filed with such number of copies as the Authority may from time to time determine.

(15) An application or communication shall be filed for registration during office hours at the principal office of the Authority, or such other office as may be directed by the Authority. An application or communication may be forwarded to the Authority through registered post or courier service. If an authorized agent files an application or communication on behalf of any party, the document authorizing the agent to do so shall be filed along with the application or communication, if not already filed in the record of the case.

6. Admission of application. — (1) As soon as may be, but no later than fourteen days of the date of filing of the application, it shall be placed before the Authority for admission.

(2) The Authority may call for submission by the applicant of any further supporting communication for the purposes of evaluation of the application for admission, within such time as it specifies. The Authority shall not be required to entertain or admit any application until such supporting communication is furnished.

(3) The Authority may, if a prima facie case for evaluation exists, admit the application for consideration without requiring attendance of the applicant. The Authority shall not pass an order refusing admission without giving the applicant an opportunity of being heard or making a written representation.

(4) In case the Authority admits the application, it may give such orders and directions for the service of notices as it deems appropriate to--

(a) all persons affected or interested by the application, who in the opinion of the Authority are likely to be affected or interested ; and

(b) persons who, by reason of their calling or expertise, may be of assistance to the Authority in arriving at a just and informed determination of the proceedings.

(5) The Authority may, if it deems appropriate, direct the advertisement by publication of the title and brief description of the application in any one or more newspapers specified for the purpose by the Authority. Such publication shall also contain a notice of the availability of a copy of the application at the office of the Authority upon payment of the fee determined for the purpose by the Authority.

7. Publication and service of notices. — (1) A notice or process issued on the directions of the Authority may be served by the Registrar or the party concerned as the Authority may direct, and the Authority may direct the service to be effected through any one or more of the following modes of service, namely: —

(i) by hand delivery through a messenger;

(ii) by registered post with acknowledgment due ; or

(iii) by publication in a national daily newspaper in the English language and two national daily newspapers in the Urdu language and by advertisement in the electronic media, in cases where the Authority is satisfied that it is not reasonably practicable to serve notices in any other manner.

(2) Every notice or process required to be served on or delivered to any person may be sent to the person at the address furnished by him for service or at the place where the person or his agent ordinarily resides or conducts business or personally works for gain and where a person is to be served during the course of the proceedings and such person has authorized an agent or representative to represent him in the proceedings, such agent or representative shall be considered duly authorized to accept service of a notice and process on behalf of the person concerned.

(3) In case an applicant does not fulfill the requirements of these rules or directions of the Authority regarding service or publication, the Authority may either dismiss the application or give such further directions, as it deems fit and proper.

(4) No service or publication shall be deemed invalid by reason only of any defect in the name or description of a person if the Authority is satisfied that such service or publication is in all other respects sufficient.

8. Intervention. — (1) Any interested person who desires to participate in the proceedings may file an intervention request for leave to intervene along with the fees determined for the purpose by the Authority.

(2) The intervention request shall state the name and address of the person filing the same and shall describe the manner in which such person is or is likely to be substantially and specifically affected by any determination in the proceedings. The intervention request shall state the contention of the person making the same, the relief sought and brief particulars of the evidence such person intends to adduce during the course of the proceedings.

(3) The Authority may grant leave to intervene, subject to such conditions, if any, as the Authority may deem appropriate. The Authority may grant leave to intervene without requiring attendance of the intervener. The Authority shall not pass an order refusing to grant leave to intervene without giving the intervener an opportunity of being heard or making a written representation. The Authority, while refusing leave to intervene, may direct the person making the intervention request to file such communications before the Authority as may have been referred to in the intervention request, and such communications may be taken into account by the Authority in accordance with rule 10 of these rules which shall be applicable to such communications mutatis mutandis.

(4) No intervention request may be filed or acted upon during a hearing unless permitted by the Authority after opportunity for all parties to object thereto, which may be made orally or in writing, as the Authority may direct. If no objection is made, the Authority may decide to accept or deny the intervention request based on the procedural and substantive merits of the intervention request.

(5) No intervention request may be filed or acted upon after the close of evidence in the proceedings.

9. Reply and Rejoinder. — (1) Each person to whom a notice of the filing of an application is issued pursuant to clause (b) of Sub-Rule (4) of rule 6 of these rules, or any person whose intervention request has been accepted by the Authority, who intends to oppose or support the application may file a reply within fifteen days of the date of service of notice or the date of acceptance of the intervention request, as the case may be, with such number of copies as may be directed by the Authority.

(2) In the event a person referred to in Sub-Rule (1) does not file a reply, the Authority may decide the application on the basis of, inter alia, the documents and evidence submitted by the applicant.

(3) In the reply, the person filing the same shall specifically admit, deny or explain the facts stated in the application and may also state additional facts which are relevant and necessary for reaching a just and informed decision in the proceedings. The reply shall be signed, verified and supported by means of an affidavit in the same manner as in the case of the application.

(4) The person filing a reply shall serve a copy of the reply duly attested as a true copy on the applicant or its authorized representative and file proof of such service with the Registrar at the time of filing the reply.

(5) Where the person filing a reply states additional facts, data or reports, the Authority may allow the applicant to file a rejoinder to the reply within fourteen days of the order of the Authority to this effect. The procedure described in this rule for filing of the reply shall also apply to the filing of the rejoinder.

10. Comments and Participation. — (1) A person, other than an intervener or a person to whom a notice pursuant to clause (b) of Sub-Rule (4) of rule 6 of these rules has been issued, who intends to file any comments in relation to any proceedings before the Authority shall deliver to the Registrar a statement of comments.

(2) The Authority may permit such a person to participate in the proceedings, if the Authority considers that the participation of such a person shall facilitate the proceedings and the Authority’s decision in the matter. The person filing the statement of comments pursuant to Sub-Rule (1) shall not be entitled as of right to participate in the proceedings.

(3) The Authority shall take into account the contents of any statement of comments filed pursuant to Sub-Rule (1) in the final determination. If the Authority deems fit, it may invite written representations by the parties to the proceedings in response to the statement of comments.

11. Hearings by the Authority. — (1) After the filing of the pleadings, the Authority shall examine the same and determine whether a hearing is required to arrive at a just and informed decision. For the purposes of determining the same, the Authority may administer discoveries and interrogatories to any person; make information directions; or require the appearance of any person.

(2) If the Authority orders a hearing, it shall fix the date of hearing for the parties to present written or oral arguments on the basis of the pleadings. The Authority may also frame the issues over which the parties may be allowed to address arguments and present evidence before the Authority. In framing the issues, the Authority may exclude one or more issues or matters raised or stated in the pleadings and may include additional issues or matters not raised in the pleadings.

(3) If the Authority determines not to hold a hearing, it shall inform the parties of its decision no later than seven days of such determination. The parties shall, no later than ten days of receiving such notice, file with the Registrar the detailed evidence referred to in the pleadings.

(4) Notice of the commencement of a hearing shall be given at least fourteen days prior thereto, unless the Authority determines, for reasons to be recorded in writing, that a shorter period of notice is in the public interest:

Provided that, once hearing in the proceedings has commenced, notice of the next date of hearing may be of any period determined by the Authority and may be announced by the Authority at the time of adjournment of the hearing or by notice to the parties in accordance with Sub-Rule (1) of rule 7 of these rules.

(5) The Authority shall maintain a public listing of all proceedings set for hearing at a place accessible to the general public.

(6) All hearings shall be at the principal office of the Authority unless a different location is designated in the notice for hearing.

(7) Where, on a date fixed for hearing, any of the parties does not appear, the Authority may either dismiss the application for default of appearance of the applicant or proceed against the party in default and hear and decide the application.

(8) Where an application has been dismissed or decided in default of appearance of a party, the person aggrieved may file a motion, within ten days of the date of such dismissal or decision, seeking a recall of the order passed. The Authority may recall the order on such terms as it considers fit, if it is satisfied that there was sufficient cause for non-appearance of the party.

(9) The Authority shall declare close of evidence following the submission of all the evidence by the parties. A party shall not present additional evidence after it has closed its evidence nor may any hearing be reopened after having been closed, except upon motion and the showing of good cause. The Authority shall give notice to all parties of its ruling upon such motion.

(10) Where the Authority decides not to hold a hearing, the evidence shall be deemed to have been closed thirty days prior to the expiry of the time prescribed under Sub-Rule (2) of rule 16 of these rules.

(11) Notwithstanding the close of evidence in the proceedings, for the purposes of arriving at its final determination, the Authority may administer discoveries and interrogatories to any person; make information directions; or require the appearance of any person.

(12) Where the Authority decides not to hold a hearing, it shall render its final determination in the proceedings on the basis of the pleadings, the evidence filed by the parties and the communications filed by any person.

12. Discovery.----- (1) At any stage of the proceedings, the Authority may require any person to produce such documentary or other evidence as the Authority may consider necessary for the purpose of enabling it to conduct a fair hearing or to arrive at a just and informed decision:

Provided that such evidence shall only be used for the purposes of the hearing and shall be kept confidential by the Authority if the person providing the evidence proves, to the satisfaction of the Authority, that it would be detrimental to such person’s interests if the evidence is disclosed.

(2) A party to any proceedings may, at any time before the close of evidence, make a motion to the Authority for discovery of any document or other information from any party to the proceedings or from any other person. The motion for discovery shall specify the nature and content of the discovery sought and its relevance to the issues in the proceedings. The Authority may -

after giving an opportunity of responding orally or in writing, as deemed fit by the Authority, within the time limit specified by it for the purpose, to the party by whom the discovery is sought, reject the motion for discovery if deemed by the Authority to be irrelevant or unnecessary for the purposes of the proceedings or unlikely to be of assistance to the Authority in its decision; or
after giving an opportunity of responding orally or in writing, as deemed fit by the Authority, within the time limit specified by it for the purpose, to the party against whom the discovery is sought, accept the same subject to any amendments to the contents or extent of the discovery request in the motion.

(3) Upon the acceptance of a motion for discovery, the Authority shall direct the person from whom the discovery is sought to produce the required documents or information before the Authority within the time limit directed by the Authority and, upon production as aforesaid, the Authority shall provide a copy thereof to the party making the motion for discovery.

(4) Where the directions for discovery made by the Authority on the motion of a party are not complied with within the time limit determined for the purpose, the party making the motion for discovery shall immediately bring such failure of discovery to the notice of the Authority. Failure of a party to file a motion to compel discovery in a timely manner may result in a waiver of its right to compel the discovery.

(5) A party which has produced any document or information in response to a direction for discovery, shall be under a continuing duty to bring to the notice of the Authority any changes rendering the contents and meaning of any documents or information inaccurate or incomplete, and shall amend such documents or information in accordance with the directions of the Authority.

13. Interrogatories. --- (1) The Authority may, whether by itself or on a motion made by any party and granted by the Authority, on such terms as it may deem fit, administer written interrogatories to any person. The interrogatories shall state the questions whose answers are sought by the Authority or any party to the proceedings. The Authority shall ensure that the questions stated in the interrogatories are relevant to the issues in the proceedings.

(2) A person to whom interrogatories are administered shall respond thereto within the time limit specified by the Authority. The response to interrogatories shall be made in writing and shall be filed with the Registrar.

(3) Where interrogatories administered on the motion of a party are not responded to within the time limit specified for the purpose by the Authority, the party making the motion for interrogatories shall immediately bring such failure of response to the notice of the Authority. Failure of a party to make a motion to compel response to the interrogatories in a timely manner may result in a waiver of its right to compel the response.

14. Transcripts. --- (1) The Authority may of its own and shall on a motion made by any party in writing at least seven days before the date of a hearing, arrange that the proceedings at the hearing be officially transcribed.

(2) If the hearings are transcribed pursuant to Sub-Rule (1), a party requesting a copy of the transcript shall pay to the Authority the reasonable cost of preparing the copy.

(3) A correction in the official transcript may be made only to make it conform to the evidence presented at the hearing. A correction in the official transcript agreed to by the parties may be incorporated into the record, if and when approved by the Authority, at any time during the hearing; or after the close of evidence:

Provided that no correction in the official transcript shall be incorporated later than ten days from the date of receipt of the transcript by the party seeking the correction.

15. Tentative opinions. --- (1) At any stage in a proceeding, the Authority may record, in writing the tentative opinion of the Authority on the application or any particular issue therein. The purpose of recording such tentative opinion shall be to afford the applicant an opportunity to appraise the prospects of its application and accordingly to consider withdrawal or modification of its application or the evidence adduced by it. The tentative opinion shall contain a statement of reasons and a determination of each issue relevant to such opinion.

(2) Neither the Authority nor the applicant shall be bound, or in any manner be restricted, by a tentative opinion rendered pursuant to Sub-Rule (1) and nothing recorded in a tentative opinion shall be used in any manner prejudicial to the interests of the Authority or an applicant.

16. Decisions of the Authority. ---- (1) All orders, determinations and decisions of the Authority shall be taken in writing and shall identify the determination of the Chairman and each member.

(2) The Authority shall decide an application within six months of the date of filing of the application:

Provided that, the Authority may, only for causes beyond its control, extend the said six month period by a further period of one month, provided further that, the Authority shall not extend the time for its final determination in a proceeding beyond an aggregate period of six months. The reasons for such extension in time shall be recorded in writing.

(3) Copies of all orders, determinations and decisions made or issued by the Authority, shall be certified under the signature of the Registrar and the seal of the Authority and shall be made available to any person on payment of such fees as the Authority may determine form time to time. Copies of all such orders, determinations and decisions shall be available at the principal office of the Authority for public inspection free of cost.

(4) Within thirty days of the final determination in the proceedings by the Authority, a party may file a motion for review of such final determination. A motion for review shall specify the grounds on which review is sought by the party. Parties to the proceedings shall be afforded a reasonable opportunity to respond to a motion for review, orally or in writing as deemed fit by the Authority. The Authority may, in its discretion, convene a conference or hearing to discuss the motion. The Authority shall act upon a motion for review within fourteen days of receipt of such motion unless it gives notice to the parties, in writing, that a longer period of time will be required and specifies the additional period of time necessary to consider the motion.

PART III

EVALUATION OF THE APPLICATION

17. Evaluation of the application. --- (1) The Authority shall evaluate an application made under rule 5 of these rules while considering, inter alia, the following:

(a) The technical, administrative and financial capabilities of the applicant in relation to the regulated activity for which the license is sought.

(b) The viability of the sources of supply of natural gas.

(d) The methods and procedures proposed to be adopted for operating and maintaining the transmission, distribution or other related facilities.

(e) The technical specifications of the proposed transmission, distribution or other related facilities.

(f) The basis for potential demand for the transmission, distribution or sale of natural gas.

(g) In the case of a project:

(i) The capital costs of the project.

(ii) The avoidance of duplication with other pipelines.

(iii) The assessment of economies of scale.

(2) To evaluate applications filed under rule 5 of these rules the Authority may perform investigations, collect necessary information, consult with the federal and provincial governments and local authorities, and generally take any measure it deems fit or action it considers necessary to decide whether or not to allow such application.

PART IV

LICENCE CONDITIONS

18. Transfer or assignment of licenses.- No license shall, without the prior written approval of the Authority, be assigned or transferred. The Authority shall act on request for approval by a licensee within ninety days thereof unless for reasons to be recorded in writing, the Authority determines that it is not in the public interest to do so. It shall be the licensees obligation to provide the Authority all information required by it for the purposes of approval of a transfer or assignment of the license.

19. Power to regulate distribution of natural gas.- Notwithstanding anything contained in a contract or agreement between one licensee and another or between a licensee and a consumer, the Authority may, if it is satisfied that it is necessary in the public interest so to do, of its own accord in a public emergency or on the application of the license, by order in writing, determine the maximum amount of gas which a the licensee may supply to another licensee or to a consumer, whether generally or during such period as may be specified in the order:

Provided that, save in a public emergency, prior to making such an order the Authority shall provide all affected parties an opportunity of filing motions in support of or in opposition to the proposed order.

20. Accounting requirements.- (1) In addition to the statutory accounts a licensee is required to keep under any law for the time being in force, all licensees shall maintain, keep, preserve and submit to the Authority, audited yearly regulatory accounts.

(2) The Authority may require licensees to have the accounts specified in Sub-Rule (1) further audited, at the cost of the Authority, by an auditor appointed by the Authority and licensees shall afford such auditors all facilities and provide them with all information required by them for the proper execution of such audit.

21. Tariff for individual regulated activities.- (1) No licensee shall charge for any regulated activity any fixed or variable amount in excess of the relevant tariff approved by the Authority from time to time and publicized by the licensee in the print and electronic media or provide service on terms and conditions other than those approved by the Authority from time to time in accordance with the Natural Gas Regulatory Authority (Tariff) Rules, 2001.

(2) No licensee shall, without prior written authorization of the Authority, charge any category of retail consumer, for the supply of natural gas, any sale price or minimum charge other than the sale price or minimum charge, as the case may be, notified by the Federal Government for such category of retail consumer pursuant to Section 19 of the Ordinance.

(3) The criteria for approval and modification of tariffs for regulated activities shall include:-

(a) provision for the protection of consumers against monopolistic and oligopolistic pricing;

(b) a licensee’s cost on research, development and capital investment programme;

(c) provision of reasonable returns to the licensee to attract investment for the quantitative and qualitative improvements of regulated activities;

(d) encouragement and reward of efficiency;

(e) sending of appropriate price signals regarding the relative abundance or scarcity of supply of natural gas for a regulated activity;

(f) minimizing economic distortions, and

(g) keeping in view the costs of alternate or substitute sources of energy.

22. Obligations of licensees. -- All licensees shall be required --

(a) to comply with all laws, rules and regulations pertaining to or relevant, to the undertaking of the regulated activity for which a license is granted to it;

(b) to supply natural gas of the quality and specifications determined from time to time by the Authority after taking into consideration the views of interested persons;

(c) to refrain from exercising discrimination against or showing undue preference towards any consumer, producer of natural gas or any class of consumers or producers;

(d) not to interrupt its service to its consumers in order to comply with its contractual obligations owed to another licensee or for compliance with a direction issued by the Authority under these rules or any other reason which is not the fault of, or is not attributable to, the licensee unless the contract between the licensee and a consumer expressly provides for the same;

(e) to provide transmission or distribution service or make sales of natural gas to all persons who meet the eligibility criteria laid down by the Authority on the basis of the policy guidelines issued by the federal government in this behalf:

Provided that if the Authority agrees with the licensee that it is not financially viable for the licensee to provide transmission or distribution service or make sales of natural gas in a particular area unless the federal government makes special financial arrangements with the licensee, the licensee shall not be obliged to provide transmission or distribution service or make sales of natural gas in the said area unless the required financial arrangements are made by the federal government; if the licensee does not provide such service, the Authority may allow other persons to compete for a license to provide such service as a project through a bidding process prescribed by the Authority;

Provided further that if the licensee proves to the satisfaction of the Authority that demand cannot be met on account of limited quantity of natural gas at the source of supply, the licensee shall not be obliged to provide transmission or distribution service or make sales of natural gas;

(f) to provide to the Authority such information in respect of its business activities, capital expenditure proposals, expansion programmes and any other matter relevant for the exercising of any of its powers by the Authority, in such form, and within such time as the Authority may, in writing, reasonably require in accordance with the provisions of its license;

(g) to enter into all contracts on an arm’s length basis and not to enter into any contract or other arrangement with any of its associated companies except with the prior written approval of the Authority;

(h) to refrain from entering into or amending any supply contract unless it is in a format approved by the Authority;

(i) to refrain from entering into or amending any supply contract of a quantity greater than one (1) MMCFD of natural gas unless it has been approved by the Authority;

(j) to refrain from entering into or amending any contract material to a regulated activity with a producer of natural gas unless it has been approved by the Authority;

(k) to locate, design, construct, operate and maintain its facilities in strict accordance with the technical and other standards prescribed by the Authority and in a manner so as not to endanger public health or safety;

(l) to strictly follow the requirements of the Pakistan Environmental Protection Act, 1997 (XXXIV of 1997);

(m) to submit to the Authority for approval, a consumer service manual setting out the rights and obligations of the licensee viz-a-viz all its consumers;

(n) to measure volumetrically, using correct meters and invoice consumers their consumption of natural gas in terms of BTU;

(o) not to abandon any facility or pipeline resulting in a discontinuance by it to provide transmission or distribution service or make sales of natural gas without the prior written consent of the Authority;

(p) to lay, within a specified time, pipelines in a particular area covered in its license;

(q) to mark with conspicuous signs the place where a pipeline enters, leaves or crosses a road, railway, river, canal, waterway or other area of public use;

(r) to seek prior approval of the Authority for any expansion of its transmission facilities of a capacity of 25 MMCFD or more;

(s) to ensure prudence, cost effective, and economic efficiency in its capital expenditure programme;

(t) to provide, for a fee determined by the Authority, non-discriminatory open access to its transmission or distribution facilities, provided spare capacity not being used by it is available;

(u) to provide interconnection to its transmission or non-exclusive distribution facilities on mutually agreed terms and conditions, provided spare capacity not being used by it is available and the interconnection is technically feasible;

(v) to extend and expand its transmission or distribution facilities at the request of a person provided that it is technically feasible and apportionment of the cost is agreed;

(w) to obtain and maintain current insurance, from an insurer or syndicate approved by the Authority, to cover all liabilities that may arise from the undertaking of the regulatory activity;

(x) to publish information regarding available capacity and capacity not contracted for;

(y) to abide by such conditions as the Authority may prescribe regarding safety of humans beings, animals and property;

(z) to maintain an annual programme for maintenance and safety and submit to the Authority details of its implementation;

(aa) to, in the case of distribution licensees, provide or procure to be provided, at the option of consumers, leak control services;

(bb) to strictly follow the standards for performance and quality of service laid down by the Authority;

(cc) not to, without the prior approval of the Authority, through a sale or pledge of, or mortgage or charge over, any of its assets (except for securing repayment of a loan or other financing facility obtained in the normal course of business) or by contract or otherwise, render itself incapable of performing any of its obligations under the license;

(dd) to take all necessary actions to ensure the continuous and uninterrupted use of any part of the sold, pledged, mortgaged or charged assets;

(ee) not to allow any change in its ownership or controlling interest without the prior approval of the Authority; and

(ff) to require their auditors to owe the same fiduciary duty to the Authority as is owed to them and to allow the disclosure by the auditors of any and all information required by the Authority through direct bi-lateral communication between the auditors and the Authority.

23. Right of access.- (1) Subject to the terms of its license, licensees shall have the right, upon not less than twenty four hours notice and at reasonable times, to enter any premises or property for the purposes of inspection, repair and maintenance of all facilities, equipment and apparatus relating to the regulated activities, the collection of payments, lawful disconnections, and the examination of the suitability of property for construction or the installation of facilities, equipment or apparatus relating to the regulated activities, provided that no such notice will be required to be given if such entry is necessary to respond to, and remedy, a situation endangering public safety caused by a regulated activity.

(2) Subject to the provisions of Sub-Rules (3) and (4), a licensee may lay, place, construct or install on under or over any land such works as may be necessary for such licensee to satisfy its service obligations under these rules and its license including such other actions as may be necessary to render the works safe and efficient and the licensee shall pay compensation to any person adversely affected by any disturbance or damage that may be caused thereby and such compensation may include annual payment for use of land.

(3) Before entering on any land for the purposes specified in Sub-Rule (2) the licensee shall give notice of the intended action to the owner or occupier of the land. The owner or the occupier of any land may file objections with the Authority within fourteen days of such notice.

(4) If an objection to the notice required by Sub-Rule (3) is filed, the Authority shall hold an inquiry and provide all interested parties an opportunity of being heard. Upon conclusion of the enquiry, the Authority may either unconditionally or subject to such terms and conditions as may be deemed in the public interest, by a decision in writing, authorize or prohibit any of the acts specified in the notice.

(5) The enquiry shall be held either at the district headquarters of the district, or the Provincial Headquarters of the Province, in which the land is situated.

24. Revocation of licenses. -- Notwithstanding anything contained in these rules or a license, the Authority may revoke a license in the public interest where:-

(a) the licensee commits a willful and prolonged contravention of these rules or its license; or

(b) the licensee, in the reasonable opinion of the Authority, is unable to or is likely to be unable to discharge the obligations imposed on it under these rules or by its license; or

(c) when services provided by the licensee are interrupted without any reasonable explanation or authorization of the Authority:

Provided that, if it is in the public interest to do so, instead of revoking the license, the Authority may permit the license to remain in force with such amendments or upon such terms and conditions as it deems appropriate:

Provided further that the Authority shall not pass an order revoking or amending a license without issuing a notice to the licensee and giving the licensee an opportunity of being heard and making a written representation.

25. Relocation of facilities. -- The Authority may direct a licensee to relocate any facility or pipeline if it is in the public interest to do so:

PART V

MODIFICATION OF LICENCES

26. Modification on the licensee’s request. ---- (1) If a licensee requires a modification of any term or condition of its license, it may make an application to the Authority by filing it with the Registrar along with such fees as may be determined by the Authority from time to time.

(2) An application filed pursuant to Sub-Rule (1) shall be accepted by the Registrar within 3 days of receipt thereof and the Registrar shall endorse thereon a stamp acknowledging the filing along with the number given thereto in the register. Rules 5 to 16 of these rules shall apply mutatis mutandis to such an application and it shall be determined by the Authority accordingly:

Provided that the time limit prescribed in Sub-Rule (2) of rule 16 of these rules shall be restricted in the case of such an application to three instead of six months.

27. Modification without a request from the licensee. --- (1) The Authority may initiate the process of modification of the terms and conditions of a license without a request from the licensee if the Authority determines, for reasons to be recorded in writing, that it is in the public interest to do so.

(2) After the Authority has initiated the license modification process, it would be processed in the manner specified in sub rule (2) of rule 26 of these rules:

Provided that the Authority shall be required to hold a hearing in accordance with the provisions of rule 11 of these rules to determine whether and to what extent a modification of a license is required in the public interest which modification shall be consistent with Sub-Rule (1) of rule 4 of these rules.

PART VI

MISCELLANEOUS

28. Seal of the Authority.--- (1) There shall be a seal of the Authority which shall remain in the custody of the Registrar.

(2) The seal of the Authority shall be affixed by the Registrar on all licenses, orders, determinations, decisions or communications made, notices issued or certified copies granted by the Authority.

29. Effect of irregularity in proceedings. - No proceedings shall be invalid by reason of any defect or irregularity unless the Authority, on an objection taken by any party, declares that substantial injustice has been caused by such defect or irregularity or there are otherwise sufficient reasons for declaring so, and the Authority may, in such an event, make such orders as it deems appropriate for the rectification of such defect or irregularity.

30. Extension of time. --- (1) Subject to the provisions of Sub-Rule (2) of rule 16 of these rules, the Authority may, for good cause shown, extend any time limit prescribed by these rules or specified by the Authority.

(2) All requests for extensions of the time shall be made by motion before the expiration of the period originally prescribed or previously extended. The Authority shall give notice to all parties of the Authority’s determination upon such motion.

31. Penalty.- (1) In addition to any penalty to which a licensee may be liable under rule 24 of these rules and subject to Sub-Rule (3), any licensee who contravenes any of these rules or a license, order, determination, decision, direction or instruction of the Authority shall be punishable with fines which may extend to one-half of one percent of the annual turnover of the licensee in the most recent complete financial year and, in the case of a continuing contravention with additional fines which may extend to one quarter of one percent of the annual turnover of the licensee in the most recent complete financial year for every day during which such contravention continues after the first contravention.

(2) Subject to Sub-Rule (3), any person other than a licensee who contravenes any of these rules or an order, determination, decision, direction or instruction of the Authority shall be punishable with fines which may extend to ten million rupees and, in the case of a continuing contravention with additional fines which may extend to one hundred thousand rupees for every day during which such contravention continues after the first contravention.

(3) In imposing any fine under these rules, the Authority shall keep in view the principle of proportionality of the fine to the gravity of the contravention and shall allow the person liable to be penalized to show cause, orally or in writing as to why the fine may not be imposed.

32. Fees.---- (1) A licensee shall be required to pay the fees for the grant, renewal, modification, extension, assignment, review or re-issuance of a license, specified in the Schedule-II to these rules.

(2) The Authority may, with the prior approval of the federal government, amend the Schedule to these rules, from time to time.

33. Power to takeover or interrupt licensed regulated activities in a public emergency.- (1) In the event of any public emergency the Federal Government may, by order in writing, require the Authority and the Authority shall thereby be empowered to-

(i) take or cause to be taken temporary possession or control of any relevant facility, plant or equipment, maintained or worked by any licensee, or

(ii) issue directions to the licensee in relation to the undertaking of any regulated activity governed by the license;

(iii) place such restriction on regulated activities being undertaken by, or provision of regulated activities to, any person or class of persons as may be specified in such order, or

(iv) intercept and divert any regulated activity being undertaken by any person specified in such order.

(2) The Federal Government shall provide adequate compensation to such person or persons as may be affected by the action of the Authority under Sub-Rule (1).

34. Technical standards, etc. – (1) The Authority shall, after consulting interested persons and subject to these rules, prescribe by regulations published in the official Gazette, technical standards for such materials, equipment and other resources as may be required for undertaking any of the regulated activities, including specification of different standards for different classes of materials, equipment and other resources and establishment of procedures for the testing of any such materials, equipment and other resources.

(2) In determining the standards referred to in Sub-Rule (1) the Authority shall ensure that the materials, equipment and other resources are of a standard that ensures a safe and efficient environment.

35. Offences.- (1) Any person who undertakes any regulated activity in contravention of the Ordinance or these rules shall be guilty of an offence punishable with imprisonment for a term which may extend to two years, or with a fine, or with both.

(2) If any person, without lawful excuse, willfully or recklessly undertakes any regulated activity which causes physical damage to the person or property of another, he shall be guilty of an offence punishable with imprisonment for a term which may extend to three years, or with a fine or with both.

(3) If any person does any act with the intention of interfering, without authorization, with any licensed regulated activity, and thereby causes damage to any facility, plant, equipment or material employed for such regulated activity, such person shall be guilty of an offence punishable with imprisonment for a term which may extend to two years, or with a fine or with both.

(4) If any person willfully or recklessly damages any facility, plant, equipment or material employed in any regulated activity, he shall, on a reference by the licensee, be liable to pay such amount as the Authority may determine for making good such damage, and the amount so determined shall be recoverable as arrears of land revenue.

(5) Where any person has stolen, unauthorizedly obtained or otherwise used natural gas for which he has not paid, such person shall be liable to pay the value of the natural gas stolen, obtained or used as may be determined in accordance with regulations made by the Authority for the purpose along with any penalty determined by the Authority.

(6) Any person who attempts to commit or aids, abets, or counsels or procures the commission of any offence under these rules shall be punishable with the same punishment as is provided for the offence under these rules.

(7) The provisions of this rule shall be in addition to, and not in derogation of any other law for the time being in force.

(8) No court shall take cognizance of any offence under this rule except on a complaint in writing by the Authority or a person authorized by it.

36. Immunity.- No suit, prosecution or other legal proceeding shall lie against the Authority, the Chairman or any Member or any person employed by the Authority in respect of anything done or intended to be done in good faith under the Ordinance or these rules or regulations of the Authority.

37. Information.- The Authority may call for any information, required by it for carrying out the purposes of these rules from any person which is involved, directly or indirectly, in any regulated activity or any matter incidental or consequential thereto. Any such person, shall be liable to provide the information called by the Authority within such period as may be determined by the Authority.

38. Certification of public purpose for compulsory acquisition of land.- (1) The Authority may, on an application by a licensee, certify that the requirement of a licensee to acquire a property is for a public purpose. For the purpose of the Land Acquisition Act, 1894 (1 of 1894), the certificate of the Authority shall be conclusive proof that the proposed acquisition for such licensee is for a public purpose.

(2) The procedure for certification by the Authority shall be prescribed in regulations notified by the Authority in the official Gazette.

39. Sums due to the Authority. - All amounts due to the Authority may be recovered as arrears of land revenue.

40. Entry, inspection and enforcement. -- The Authority may authorize any person to enter, inspect or examine any place in which such person has reason to believe that there is any appliance or apparatus used in transmission, distribution or sale or use of natural gas or to take other necessary steps to ensure observance of the provisions of the Ordinance, these rules or regulations of the Authority by consumers, licensees or any other person connected directly or indirectly with transmission, distribution or sale or use of natural gas.

41. Appeal from decisions of delegatees. --- Within fifteen days of the final decision by a person to whom power has been delegated by the Authority to take decisions on its behalf, a person may file a motion for leave to appeal such final decision. A motion for leave to appeal shall specify the grounds on which the decision is to be appealed. The Authority shall act on such a motion within fourteen days of receipt thereof unless for reasons to be recorded it holds that it is not in the public interest to do so.

PART VII

TRANSITIONAL

42. Deemed Licensees. ---- (1) Within one month of the commencement of these rules, all existing companies shall make applications to the Authority, in accordance with the provisions of these rules, for obtaining licenses to carry on regulated activities and shall, at the time of making such application, in addition to the application fee payable by them, pay the annual fee applicable to them at the rate specified in ~~the~~ Schedule - II.

(2) The existing companies shall be deemed to be licensed, under the Ordinance and these rules, to carry on regulated activities on the terms and conditions applicable to them on the date these rules come into force, until such time as the Authority has made its final determination on the applications specified in Sub-Rule (1).

SCHEDULE - I

NATURAL GAS REGULATORY AUTHORITY

Application Form

Ref. No. _______________

Date: _____ / _____ / 2001

Company Profile
1) Name of the Company (Applicant):
2) Company’s full address alongwith telephone, fax, e-mail and web details:
3) Name, title and authorized signature of the Company’s Chief Executive:
4) Names and addresses of current Directors of the Applicant:
5) Name and address of any person or corporate body with a holding of more than one percent (1%) or more in the Applicant:

License Specifications

1) Regulated Activity for which a license is sought:

a) Transmission License ________

b) Distribution License ________

c) Sale License ________

d) Integrated License ________

e) Project License ________

2) Nature of license applied for (if exclusive, please provide detailed justifications):

Exclusive ___________

Non-Exclusive __________

3) Period for which the license is sought:

From: Date / Month / Year

To: Date / Month / Year

4) Details of any license held, applied for, or applied for and refused under the Rules, by the Applicant, or any of the interested parties, or any of their affiliated or related undertakings:

SCHEDULE-II

1. The following fees shall be payable for the application, grant and renewal of a license:

(a) The following application fees, payable at the time of filing the application:

For a transmission license: Rs. 750,000

For a distribution license: Rs. 500,000

For a sale license: Rs. 500,000

For an integrated license: Rs. 1,000,000

For a project license: Rs. 1,000,000

The application fee shall be subject to automatic revision at the beginning of every financial year and shall be increased by the percentage amount of the most recent consumer price index notified by the State Bank of Pakistan.

(b) The following annual fees, payable at the time of the grant or renewal of the license and thereafter yearly, in advance;

S#	Type of License	Fee (percentage of annual turnover of the licensee, generated from the licensed regulated activity in the most recent complete financial year
(i)	Transmission	0.5%
(ii)	Distribution	0.5%
(iii)	Sale	0.25%
(iv)	Transmission & distribution	0.5% of both transmission and distribution
(v)	Transmission, distribution & sale	0.5% of sale
(vi)	Transmission & sale	0.5% of sale
(vii)	Distribution & sale	0.5% of sale

Explanation:-

Annual turnover of the licensee means the actual turnover less amounts representing, Sales Tax, Gas Development Surcharge and other such charges, levies, duties, taxes, or cesses imposed by the Federal Government and if applicable, the cost of natural gas.

2. Notwithstanding the provisions of clause (b) of paragraph 1, all producers of natural gas engaged in sale at the time of commencement of these rules shall, instead of the fees payable pursuant to clause (b) of paragraph 1, pay annual fees, payable at the time of applying for a license and thereafter yearly, in advance, at the rate of Rs. 0.05 per million BTU of natural gas sold to a retail consumer.

These annual fees shall be subject to automatic revision at the beginning of every financial year and shall be increased by the percentage amount of the most recent consumer price index notified by the State Bank of Pakistan.

3. The Authority may reduce, for any financial year, the fees specified in Para 1 above, if it is in the public interest to do so.

Natural Gas Rules, 1960

Oil and Gas Development Corporation Ordinance, 1961

Natural Gas (Development Surcharge) Ordinance, 1967

Natural Gas (Development Surcharge) Rules, 1967

Natural Gas Regulatory Authority Ordinance, 2000

Oil and Gas Regulatory Authority Ordinance, 2002