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On 27 August 2018, the Energy Regulatory Commission (CRE) published in the Federal Official Gazette, an accord that modifies the General Administrative Provisions regarding Open Access and Natural Gas Pipeline Transportation and Storage Services (the Provisions), which came into force the day after its publication and by which, among other things, describes the procedures, requirements and deadlines for permit holders to carry out open seasons (TA), and also simplifies secondary market capacity procedures.

Specifically, the Provisions amend the following:

Section 2. Subsection B. Open Seasons

On a one time basis, permit holders must submit before CRE for approval a TA procedure, which may be applied when it is required to allocate available capacity in their infrastructure.

The approval of the terms and conditions for the provision of pipeline transportation services or storage (T&Cs), will include the approval of the TA procedure, whose implementation terms will be established by the corresponding permit holder or manager (in the case of integrated systems), in accordance with common market practices.

It will not be necessary to perform a TA to allocate the permanent available capacity that is a remnant of a previous TA procedure. However, it must be considered for the following TA procedure that is carried out for that purpose.

Section 2. Subsection D. Secondary Market and Capacity Assignments

The main amendments to this section consist in the substitution of the term "definitive assignment" by "permanent assignment", referring to "the one through which part or all of the capacity that has been committed under capacity reserve agreements on a firm basis, is assigned for the rest of the term of the contract [...]", which implies the assignment of all rights and obligations to the assignee (user) for the assigned capacity.

Also, what is understood as "temporary assignment" is defined as "the one through which part or all of the capacity that has been committed under capacity reserve agreements on a firm basis, is assigned for a period less than the one established in the original agreement ", thereby eliminating the distinction between temporary assignments less than or equal to or greater than 6 months.

Conditions for the assignment of capacity between users may be freely agreed between them, as long as the conditions have the approval of the corresponding permit holder, in the case of permanent assignments, and provided that such assignment is feasible. The tariff agreed in the capacity reserve agreement on an original firm basis must be respected and paid to the permit holder by the users, independently of the agreement between them.

The Provisions specify the liabilities of the parties with respect to the assignment of capacity, and establishes the obligation of permit holders to submit before CRE a fees proposal for the TA launch services and other mechanisms requested by users in order to carry out the assignment of capacity, as part of the approval of the corresponding rates.

Finally, transportation and storage permit holders will have a period of 90 business days from the entry into force of the Provisions to: (i) modify and submit before the CRE the T&Cs in which they incorporate the corresponding TA procedure that comply with what is specified in these new regulations, and (ii) submit a fees proposal before the CRE for the TA launch services and other mechanisms to be implemented for the assignment of capacity, including the costs associated to the technical adjustments that may be requested.

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