This content is from: Local Insights

Uruguay

In the context of reshaping its entire energy and gas sectors, and emphasizing the liberalization policy promoted by recent Administrations, on September 3 1997, the Uruguayan Executive Branch approved Decree No. 324/97 governing import and transport of natural gas. The Decree is the regulation for the natural gas pipeline to link Uruguay and Argentina, for whose construction an international tender has recently been announced by the Uruguayan government.

The Decree lists the principles and objectives to govern import, transport, storage and distribution services related to natural gas, including:

  • promotion of competitiveness and encouragement of long-term investments;
  • reliability, free access and ample use of services and facilities;
  • fair rates, in line with international prices for countries under similar conditions;
  • efficiency; and
  • protection of the environment.

The Ministry of Industry, Energy and Mining will serve as the regulatory entity. For this purpose, the Ministry has been vested with powers to construct the Decree, settle disputes among licensees and apply sanctions, including fines.

Natural gas transport and distribution services will be rendered by public or private entities through the appropriate licence or permit. Licences shall be granted for a term not exceeding 30 years.

Large loaders (cargadores) — defined as those who operate a yearly average exceeding 100,000 metres — are entitled to select their natural gas supplier among national and foreign agents and to freely agree on the terms of their operations.

The Decree further provides that licensees of natural gas transport services shall not be able to sell natural gas, except to fulfil the transport operations. However, and with the authorization given by the regulatory entity, transport agents are empowered to maintain an interest in companies acquiring and selling natural gas: the regulatory entity shall issue regulations to make sure that the transport agent does not grant those companies a favourable treatment compared with other loaders using the same transport system.

Amendments to the Decree shall be previously discussed with interested parties.

Jonás Bergstein

Instant access to all of our content. Membership Options | One Week Trial