The decree of October 13, 2024 defining “the threshold for annual quantities of natural gas consumed on the national territory from which the sale price is freely negotiated” was published in the latest issue of the Official Journal.
In its article 2, the decree in question, signed by the Minister of Energy and Mines, Mohamed Arkab, stipulates that “the sale price of natural gas to a customer is freely negotiated when the annual quantities consumed, on the national territory, by this customer, for its own needs are greater than or equal to the threshold of two hundred million cubic meters (200,000,000 m3) of natural gas per year, for the period 2025-2026”.
A passing figure goes down to “one hundred million cubic meters (100,000,000 m3) of natural gas per year, for the period 2027-2028” and “forty million cubic meters (40,000,000 m3) of natural gas per year, from 2029”.
This order comes in application of article 146 of Law No. 19-13 of December 11, 2019 governing hydrocarbon activities.
This stipulates that “the sale price of natural gas to a customer, whose annual quantities consumed on the national territory for its own needs are greater than or equal to the threshold defined by order of the minister, is freely negotiated”.
“For these quantities, the customer must conclude a contract for the sale and purchase of natural gas for the national market with the national company and/or the co-contractor,” adds the same article.
So, almost five years after the publication in the Official Journal of this law on hydrocarbons, the executive has just set the thresholds in question.
The sale price of natural gas to electricity producers and gas distributors intended for the national market is determined by the ARH
Note that chapter 6 of the same law, relating to “determination of the selling price of natural gas and petroleum products for the national market”, mentions, in its article 147, “the selling price of natural gas to producers electricity and gas distributors intended for the national market.
This is therefore “determined by the ARH (Hydrocarbon Regulatory Authority) according to a methodology and terms which are defined by regulation”.
In this sense, there was Executive Decree No. 21-64 of February 11, 2021 setting the methodology for determining the prices of crude oil and condensate “refinery entry” and the sale price of natural gas to electricity producers and to gas distributors.
Its article 4 stipulates that these sales prices are composed of the “economic cost of production” and the “pipeline transport rate at the delivery points of the producer’s pipeline transport system”.
An economic cost price which is calculated taking into account several elements which are “production volumes, gas make-up volumes, water withdrawal for the needs of oil operations, research investment costs and development, operating costs, including financial costs and charges linked to provisions for abandonment and restoration of sites, transport constraints, taxation applicable to upstream activities and the discount rate.
Canada
