DC2017-11-0012 — Philippine Downstream Natural Gas Regulation (Original PDNGR)
Full title: Rules and Regulations Governing the Philippine Downstream Natural Gas Industry (Philippine Downstream Natural Gas Regulation / PDNGR) Signed by: Secretary Alfonso G. Cusi | Control No. DOE-AGC-17005568 Issued: November 2017 | Effective: ~December 2017 (15 days after publication) Repeals: DOE Circular 2002-08-005 (Interim Rules on Transmission, Distribution and Supply of Natural Gas) Legal basis: RA 7638 (DOE Act of 1992) Source file: raw/regulations/dc2017-11-0012.md (cleaned OCR; 3 batches, 55 PDF pages)
The founding PDNGI regulatory instrument. Established the first structured permit and accreditation system for downstream natural gas facilities in the Philippines. Repealed by Digest: DC2024-01-0007 — Amended Philippine Downstream Natural Gas Regulation on January 17, 2024.
Document Structure
| Part / Annex | Rules | Content |
|---|---|---|
| Part I — General Provisions | Rules 1–4 | Title/scope; policy; DOE responsibilities; definitions |
| Part II — Covered Facility | Rule 5 | LNG Terminal; Transmission/Distribution pipelines; Indigenous NG facility |
| Part III — Regulations | Rules 6–12 | Permits (NTP/PCERM/POM); franchise; TPA; pricing; standards; Operator duties; DNG-REC |
| Part IV — Transitory | Rules 13–14 | Existing systems; pending applications |
| Part V — Final Provisions | Rules 15–21 | Insurance; abandonment; assignment; arbitration; incentives; offenses; repealing clause; effectivity |
| Annex A | — | Permit Application Guideline: DNG-REC composition, processing timelines, fees, documentary requirements (20 pages) |
| Annex B | — | Operator and Facility Registry and Reportorial Requirements Guideline (2 pages) |
| Annex C | — | Importer and Supplier Accreditation Guideline + certificate forms C-1 through C-4 (6 pages) |
Permit System
Three permit types required for PDNGI facilities [DC2017-11-0012, Rule 6 §§1–1.2, 2017]:
- Notice to Proceed (NTP) — Pre-construction clearance; valid 6 months (extendable 6 months for force majeure)
- Permit to Construct, Expand, Rehabilitate, Modify (PCERM) — Single combined permit (DC2024 split this into distinct PTC/PTE/PTR/PTM types)
- Permit to Operate and Maintain (POM) — Valid 25 years, renewable for another 25 years
All permits recommended by DNG-REC and approved by the DOE Secretary. Evaluation criteria: policy consistency, complete submissions, technical/financial viability, sufficient supply and market, no Anti-Competitive Act violation.
Franchise Requirement
Transmission/Distribution pipelines functioning as Public Utilities require a congressional franchise and certificate of public necessity and convenience [DC2017-11-0012, Rule 7 §1, 2017]. Ownership must comply with Article XII §11 of the 1987 Constitution (60% Filipino ownership). Rates for public utility pipelines are set by DOE in coordination with ERC.
This was the principal structural distinction from later regimes:
- DC2024-01-0007 revised to require only Public Service Act / CA 146 compliance
- RA 12120 eliminated the franchise requirement entirely; DOE Permit is sufficient
Third Party Access
TPA applies only to available and uncommitted excess capacity — not to entire facility capacity [DC2017-11-0012, §8.2, 2017]. Applies to LNG Terminals, Transmission, and Distribution Systems. Two TPA types: Negotiated TPA and Competitive TPA (fewer than DC2025-04-0005 IRR’s three types).
Infrastructure Development Period (IDP): New infrastructure projects exempt from TPA obligations during an IDP determined at permit issuance. Also applies to significant capacity increases enabling new gas supply or market [DC2017-11-0012, §8.3, 2017]. This exemption was removed in DC2024-01-0007 and not carried into RA 12120.
Pricing
Retail price of LNG-converted Natural Gas is deregulated, except for public utility operations. Pricing must be unbundled into: (1) Landed Cost and (2) Tolling Fee [DC2017-11-0012, Rule 9, 2017].
DNG-REC Composition
The Downstream Natural Gas Review and Evaluation Committee (DNG-REC) was constituted with six members [DC2017-11-0012, Annex A §2, 2017]:
| Role | Position |
|---|---|
| Chair | Supervising Undersecretary, OIMB |
| Vice Chair | Supervising Assistant Secretary, OIMB |
| Member | Director, OIMB |
| Member | Director, Legal Services |
| Member | Director, Financial Services |
| Member | Director, Information Technology and Management Services (ITMS) |
The ITMS Director seat was removed in DC2024-01-0007, reducing DNG-REC to five members. Secretariat: Assistant Director OIMB (Head); NGMD/OIMB; LS; FS; Information Services/ITMS staff.
Processing Timelines
NTP processing under the original PDNGR (all in working days) [DC2017-11-0012, Annex A, 2017]:
| Stage | Timeline |
|---|---|
| DNG-REC Secretariat completeness check | 30 working days |
| DNG-REC substantive evaluation | 45 working days |
| DOE Secretary decision | 15 working days |
Total: ~90 working days. DC2024 shifted to calendar days (15cd + 45cd + 15cd); DC2025-04-0005 IRR reduced sharply to 3wd + 12wd + 5wd.
Arbitration
Disputes between DOE and Operators resolved by ICC arbitration: venue Singapore, language English, ICC Rules of Arbitration [DC2017-11-0012, Rule 16, 2017]. Each party appoints one arbitrator within 30 days; ICC President appoints if a party fails. Decision is final and binding.
This provision was removed in DC2024-01-0007, which reverted to DOE administrative proceedings under DC2002-07-004.
Participants and Accreditation
Two commercial participant categories recognized [DC2017-11-0012, Annex C, 2017]:
- Importer — must obtain LNG Importer Accreditation Certificate (LNG-IAC) from DOE-OIMB
- Supplier — must obtain Natural Gas Supplier Accreditation Certificate
Accreditation validity: 15 years, renewable 30 working days before expiration. Pre-importation notice: 7 working days before loading. Post-importation notice: 20 working days after unloading.
DC2024-01-0007 added Aggregator, Reseller, and Bunker Trader as participant categories. RA 12120 formally defines all four types.
Fee Schedule (CY 2013 schedule, Annex A-1)
| Service | Fee |
|---|---|
| Pipeline construction permit | ₱10/meter |
| LNG terminal and related facilities permit | ₱113,000/project |
| Supply of natural gas permit | ₱93,000/project |
| Other facility permits | ₱81,000/project |
| Annual regulation and supervision fee | ₱41,000/facility |
Full text: Cleaned copy