Under resolution 186 of 2020, the Commission for the Regulation of Energy and Gas (the “CREG”) established regulations regarding, among other, the marketing mechanisms for natural gas and the types of contracts that may be agreed upon in the wholesale natural gas market.
Subsequently, through Resolutions 102 007 of 2024 and 102 009 of 2024, the CREG adopted transitional measures to make more flexible the marketing rules for natural gas supply. However, it is currently necessary to implement additional short-term measures aimed at facilitating a greater supply offer from primary market sellers and satisfying the short-term needs of the demand from the National Interconnected System.
Therefore, on October 18, 2024, CREG published for comments the draft resolution 702 010 (the “Draft”), which proposes that sellers and buyers in the primary market may register contracts for the supply of natural gas, whether domestic or imported, negotiated through the direct negotiation mechanism, for any source of supply without exception.
The contractual modalities proposed in the Draft include all firm contractual modalities contemplated in Article 8 of CREG Resolution 186 of 2020 and those that amend or supplement it.
Regarding the duration of the contracts entered into under this regulatory proposal, the Draft establishes that parties may agree under the following terms: a) one working week; b) one calendar week; c) one Saturday; d) one Sunday; or a holiday. A working week under natural gas regulation means is understood as of 00:00 hours on Monday until 24:00 hours on Friday of the same calendar week. The calendar week is the period from 00:00 hours on Monday to 24:00 hours on Sunday of the same calendar week.
According to the Draft, contracts negotiated for working weeks may have a maximum duration of 12 working weeks. If execution terms are agreed upon in calendar weeks, on Saturdays, Sundays, or holidays, the contracts may have a maximum duration of three months.
Guaranteed volumes may vary during the execution term of the same contract for each working week, calendar week, Saturday, Sunday, or holiday, provided that execution is agreed upon for these options and such volumes are recorded in the contract.
Regarding price, the general rule proposed is that it shall be a fixed price. Notwithstanding the foregoing, in the case of negotiating imported natural gas for non-regulated demand, the parties may agree on variable prices based on price indexes agreed upon in the supply contracts. In case of imported gas negotiations, the price must include all necessary costs to deliver the gas at an entry point to the National Transport System. In all cases, billing must be conducted monthly.
Additionally, special conditions are established for purchase option contracts, supply with conditional firmness, and contingency supply. For contracts executed under this resolution, CREG proposes that the parties may agree that the duration of service suspensions for scheduled technical repairs or maintenance be zero (0) hours.
All the rules stated above do not exempt the obligation to comply with the rules established in CREG Resolution 186 of 2020.
Finally, the Draft establishes that, for the application of direct negotiations, primary market sellers must declare to the Market Manager, the day after they occur, the additional quantities of PTDVF or CIDVF supply due to changes in the available information. These declarations, which may be made weekly, must include a document explaining the reasons for the variations. The Market Manager will adjust the necessary formats to facilitate these declarations.
To learn more about the Draft Resolution, please visit the following link: