Blog – Page 51

The Minister of Energy,

Based on the powers entrusted to him by law,

after perusal of paragraph 3 of article 3 of the Energy Supply Law issued by Royal Decree D/80 dated 4 Jumada Al-Thani 1444 [28 December 2022], which included that the Energy Allocation Committee shall prepare the allocation regulation and propose its amendment, and article 11 of the law, which stipulates that “the minister shall issue the regulations and the allocation regulation within a period not exceeding sixty days from the date of publication of the law in the official gazette, and they come into force from the date of its entry into force,”

and the submissions of the Energy Allocation Committee in Recommendation 3/1/R dated 4 Rajab 1445, corresponding to 16 January 2024, containing the Energy Allocation Regulation prepared by it,

and in pursuance of public interest,

hereby decides

First

The Energy Allocation Regulation is hereby approved in the form attached to this decision.

Second

The Energy Allocation Regulation must be published on the website of the ministry.

Third

This decision must be communicated to those who are required to implement it and act on it.

May Allah provide success.

Minister of Energy
Abdulaziz bin Salman bin Abdulaziz

Issued on: 13 Sha’ban 1445
Corresponding to: 23 February 2024

Published in Umm Al-Qura 5032 issued on 17 May 2024.

Arabic

Issued by Ministry of Energy Decision 3092/450201

Article 1

1․ The words and phrases mentioned in this regulation have the meanings outlined in article 1 of the Energy Supply Law issued by Royal Decree D/80 dated 4 Jumada Al-Thani 1444 [28 December 2022].

2․ The following words and phrases—wherever they occur in this regulation—have the meanings assigned to each of them, unless the context requires otherwise:

Allocation application: An application submitted to the ministry specifying the type and quantity of energy required.

Allocation applicant: Every person who submits to the ministry an allocation application.

Allocatee: The consumer who holds a valid energy allocation document.

Allocation purpose: The activity specified for energy utilisation.

Committee: The Energy Allocation Committee stipulated in article 3 of the law.

Article 2

This allocation regulation aims to regulate the allocation of energy to its consumers in the areas stipulated in article 2 of the law to achieve optimal uses of energy, contribute to raising the level and diversity of the national economy, achieve the objectives of the energy mix, raise energy efficiency levels, promote a circular carbon economy, and manage greenhouse gases, in a manner that does not conflict with the strategies adopted by the Higher Committee for Hydrocarbon Affairs and the Supreme Committee for Energy Mix Affairs to produce electricity and enable the renewable energy sector.

Article 3

The allocation applicant shall comply with the following:

1․ Submitting the application through the channels announced on the official website of the ministry in accordance with the procedures and forms approved for this.

2․ That the application is submitted by the allocation applicant or a person who has a legally recognised authority to represent him that grants applying for allocation.

3․ That the application includes the details of the allocation applicant.

4․ That the application includes information about the allocation application and its activity—which the ministry requests for each specific application—in accordance with the following:

(a) The name and scope of the activity, the sector in which the energy is consumed, and its geographical location.

(b) The type and quantity of energy required and the period required for allocation.

(d) The financial solvency, activity financing plan, and the financial model of the activity.

(e) Detailing the stages of implementation of the activity, indicating the date of commencement of the activity and the expected completion date, if any.

(f) A detailed plan for nationalisation.

(g) Submitting the studies required by the activity.

Article 4

1․ The allocatee shall submit any information or documents prepared by the ministry necessary for examining and evaluating the allocation application within 10 (ten) working days from the date of his notification of the status of the application. When this period elapses without correcting the application or submitting the requirements, his application is considered cancelled, and he shall, if he wishes to apply for allocation, submit a new application.

2․ The ministry may grant an additional period not exceeding 10 (ten) working days—from the date of expiry of the period specified in paragraph 1 of this article—to submit the justifications for the delay and the alternative information or documents available. In this case, the ministry may take one of the following measures:

(a) Accept the alternative data or information described in the response, while retaining the right to oblige the allocatee to submit the required information on a date to be determined.

(b) Reject the justifications for not submitting the required data or information, and considering the application as cancelled.

3․ The allocatee shall ensure the accuracy and validity of the information or documents when submitting them to the ministry. A violation of this is considered a breach of the provisions of this regulation.

Article 5

1․ The ministry shall notify the allocatee of the period necessary to evaluate and decide on the allocation application within 15 (fifteen) working days from the date of completion of his application.

2․ The ministry shall evaluate the allocation application based on the criteria approved by the committee and the available capacity.

3․ The ministry shall issue its decision rejecting the allocation application with an explanation of the reason for the rejection.

4․ The ministry shall issue the energy allocation document upon approval of the allocation application, and it shall include the details of the allocatee, the purpose of allocation, the type and quantity of energy allocated, and the duration of the document and its terms.

Article 6

1․ The renewal of the energy allocation document—if its duration is one year or less—must be based on an application submitted by the allocatee 90 (ninety) days before its expiry. The renewal application must not be considered if less than 60 (sixty) days remain until the expiry of the document.

2․ The renewal of the energy allocation document—if its duration is more than one year—must be based on an application submitted by the allocatee at least 180 (one hundred and eighty) days before its expiry.

3․ The allocatee may apply to amend the energy allocation document during its validity period, provided that the application is justified and includes the supporting documents. The amendment application is subject to the allocation application procedures stipulated in this regulation.

Article 7

Article 8

Without prejudice to the punishments stipulated in article 8 of the law, the ministry may amend or cancel the quantities of energy specified in the energy allocation document and notify the allocatee of this, if a year passes without exploiting the full quantities of energy, unless the allocatee provides reasons acceptable to the ministry, provided that the amendment is not less than the actual quantities of energy exploited. The ministry shall notify the allocatee of this amendment or cancellation within a period of not less than 120 (one hundred and twenty) days.

Article 9

The energy allocation document is not considered an approval to practice the activity required by the allocation, and the allocatee shall obtain licences and approvals pertaining to the practice of the activity under the laws in force in the Kingdom.

Article 10

The allocatee shall comply with the terms and conditions stipulated in the energy allocation document in accordance with the following:

1․ The scope of work of the activity, its applications, and the products arising from it.

2․ The efficiency of the technologies used.

3․ Expenditure localisation percentages.

4․ Workforce nationalisation percentages.

5․ The timetable.

6․ Any other term or condition that achieves one or more of the allocation criteria approved by the committee.

Article 11

The allocatee shall comply with the following:

1․ Refraining from using energy for purposes other than the allocation purposes mentioned in the energy allocation document.

2․ Submitting the data, information, and documents required by the ministry for the purpose of following up on the compliance of the allocatee with the provisions of the law, the allocation regulation, and the energy allocation document.

3․ Submitting periodic reports to the ministry in accordance with the terms and conditions of the energy allocation document.

4․ Including in the periodic reports submitted to the ministry a summary of energy consumption for the purpose of allocation and operational performance, as well as production statistics, and updating the timetable of the stages of implementation of the activity.

5․ Notifying the ministry of any change that has occurred or is expected to occur in his information or data submitted in the allocation application, any delay and difficulties in the deadline for commencing the activity, or any expected or actual change in the purpose of the allocation, or when its actual exploitation of the quantities of energy falls short of the number of quantities specified in the energy allocation document, within a period not exceeding 30 (thirty) days from the date of the occurrence of any of these cases.

6․ Submitting an amendment to the energy allocation document or requesting its termination within a period not exceeding 30 (thirty) days from the date of the notice stipulated in paragraph 5 of this article.

Article 12

The energy allocation document ends in one of the following cases:

1․ The expiry of the period stipulated in the document without its renewal or the completion of the purpose of the allocation, whichever is earlier.

2․ The approval of the ministry of the request of the allocatee to terminate the document.

3․ The issuance of a decision by the committee stipulated in article 9 of the law to cancel the document.

4․ The issuance of a decision by the ministry to terminate the document.

Article 13

The implementation of the procedures mentioned in the law and the allocation regulation must be, at any time, using the approved electronic means. If this is not possible, it is permitted to implement them—as an exception—by normal methods.

Article 14

The minister may assign the tasks of inspection and control of violations or some of them to the private sector, provided that the assignment takes into account the following controls:

1․ Adhering to the rules of inspection and control of violations issued by a decision by the minister and the procedures specified by the ministry, including the necessity of prior coordination with the ministry before inspection.

2․ Disclosing to the ministry any existing or potential interests, with the obligation to maintain the confidentiality of information.

3․ Refraining from assigning inspection and control tasks to anyone who has disclosed the existence of existing or potential interests in accordance with paragraph 2 of this article.

Article 15

This regulation is effective from the date of entry into force of the law and must be published on the official website of the ministry.