Section 19D: Acquisition of rights to use LNG facilities., Gas Act 1986

Subject to subsection (2A), the owner of an LNG import or export facility to which this section applies (a "relevant facility")—

shall publish prior to their entry into force the main commercial conditions relating to the grant to another person of a right to have gas or liquid gas treated in the facility on that person's behalf; and

shall publish any changes to the published conditions as soon as they become effective.

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The cost or the method of determining the cost of acquiring the right to have gas or liquid gas treated in a relevant facility and any changes thereto must be approved by the Authority prior to their publication; and such approval may be given on condition that certain modifications are made to the cost or methodology.

Before the owner of a relevant facility seeks approval under subsection (2A) he must carry out such consultation as the Authority may require.

The owner of a relevant facility shall ensure that the conditions which he is required to publish under subsection (1) do not discriminate against any applicants or descriptions of applicants, or any potential applicants or descriptions of potential applicants, for a right to have gas or liquid gas treated in the facility.

Any person who seeks a right to have gas or liquid gas treated on his behalf in a relevant facility ("the applicant") shall, before making an application to the Director under subsection (8), apply to the owner of the facility for the right.

An application under subsection (4) shall be made by giving notice to the owner specifying what is being sought.

Such a notice shall, in particular, specify—

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the kind of gas or liquid gas to be treated (which must be of, or similar to, the kind which the facility is designed to treat); and

the quantities of gas or liquid gas to be treated.

The owner shall notify the applicant of his decision giving reasons for any refusal.

If the owner refuses the application , the applicant may apply to the Director for directions under subsection (11) which would secure to the applicant the right specified in the notice under subsection (5).

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Where a person applies to the Authority under subsection (8), the Authority shall—

decide whether to give directions under subsection (11), to consider the application further or to reject the application

give notice of his decision to the applicant; and

in the case of a decision that the application is to be considered further—

give to the owner of the facility, the Health and Safety Executive and any person who has a right to have gas or liquid gas treated in the facility notice that the application is to be so considered and an opportunity of being heard about the matter; and

after so considering the matter, decide whether to give directions under subsection (11) or to reject the application and give notice of its decision to the applicant.

Where, after considering an application under subsection (8), the Director is satisfied that the giving of directions under this subsection would not prejudice the efficient operation of the facility, or the treatment in the facility of—

the quantities of gas or liquid gas which the owner of the facility requires or may reasonably be expected to require to be treated in the facility; and

the quantities of gas or liquid gas which any person who has a right to have gas or liquid gas treated in the facility is entitled to require to be so treated in the exercise of that right;

the Director may give such directions to the owner of the facility ; but this is subject to subsections (11A) and (11B) .

When considering whether the giving of directions under subsection (11) in respect of an LNG import or export facility would be prejudicial as mentioned in that subsection, the Authority must disregard any difficulties by virtue of which the owner of the facility may or must apply for an exemption under section 19DZA with respect to the facility.

The Authority must not give directions under subsection (11) in respect of an LNG import or export facility if—

such directions would prevent the owner from carrying out any public service obligation which applies to the owner; or

an exemption is in force with respect to the facility under section 19DZA (regardless of whether that exemption was given before or after the application to the Authority under subsection (8) was made).

Directions under subsection (11) may—

specify the terms on which the Director considers the owner of the facility should enter into an agreement with the applicant for all or any of the following purposes—

for securing to the applicant the right to have treated in the facility, ... and in the quantities so specified or determined by or under the directions, gas or liquid gas which is of a kind so specified;

for securing that the exercise of that right is not prevented or impeded;

for regulating the charges which may be made for the treatment of gas or liquid gas by virtue of that right;

for securing to the applicant such ancillary or incidental rights as the Director considers necessary or expedient ...;

specify the sums or the method of determining the sums which the Director considers should be paid by way of consideration for any such right; and

require the owner, if the applicant pays or agrees to pay those sums within a period specified in that behalf in the directions, to enter into an agreement with him on the terms so specified.

An obligation is a public service obligation for the purposes of this section if—

it is imposed by or under a provision of an Act, and

the provision is identified in a notice issued by the Secretary of State as a provision imposing, or enabling the imposition of, a public service obligation within the meaning of Article 3(2) of the Gas Directive (as it had effect immediately before IP completion day).

For the purposes of subsection (13), the reference to Article 3(2) is to be read as if the reference in that provision to natural gas undertakings of the Community were a reference to natural gas undertakings of the United Kingdom.

Section 19D: Acquisition of rights to use LNG facilities.

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