Article 15. The preferential right of the State in the field of gas and gas supply The Law on Gas and Gas Supply

Home / Laws / Article 15. The preferential right of the State in the field of gas and gas supply The Law on Gas and Gas Supply

1. In order to ensure energy security and meet domestic needs for commercial gas, the Republic of Kazakhstan has a preferential right over other persons to purchase alienated crude gas owned by subsurface users in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsurface use and subsurface use contracts, as well as commercial gas., produced by subsurface users in the process of processing the crude gas extracted by them and owned by them in accordance with the legislation of the Republic of Kazakhstan on subsurface and subsurface use and subsurface use contracts (hereinafter referred to as the preferential right of the state).

2. The implementation of the State's pre-emptive right is carried out through the national operator.

3. The price of crude gas purchased by a national operator under the State's pre-emptive right includes:

1) the cost of producing crude gas, determined on the basis of the production cost of producing a unit volume of crude gas, calculated in accordance with international financial reporting standards and the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

2) expenses for transportation of crude gas to the place of its sale to the national operator;

3) the level of profitability in the amount of no more than ten percent.

4. The price of marketable gas purchased by a national operator under the pre-emptive right of the State, with the exception of the cases specified in paragraph 4-1 of this Article, includes:

2) expenses for the production of commercial gas from crude gas;

3) expenses for transportation of commercial gas to the place of its sale to the national operator;

4) the level of profitability in the amount of no more than ten percent.

4-1. The price of marketable gas produced by subsurface users operating under a subsurface use contract concluded after January 1, 2023, in respect of the subsurface area(s) on which no crude gas production was carried out under other subsurface use contracts (licenses) prior to the specified date, is determined taking into account the complexity of the development. hydrocarbon deposits and crude gas processing, based on the arithmetic mean of the marginal prices of wholesale sales of marketable gas and export prices of marketable gas, less:

1) the cost of transporting commercial gas through the main gas pipeline system from the intended place of sale of commercial gas to the national operator to the border of the Republic of Kazakhstan;

2) the cost of transporting commercial gas from the subsurface user to the intended place of sale of commercial gas to the national operator;

3) profitability rates of the national operator in the amount of up to ten percent.

The procedure for determining the price of marketable gas provided for in this paragraph also applies to the volumes of marketable gas produced by subsurface users operating under a subsurface use contract (license) concluded (issued) before January 1, 2023, exceeding the arithmetic mean of the annual volume of sales of marketable gas by such a subsurface user to the national operator for five consecutive calendar years preceding In 2023.

5. The price of crude and commercial gas purchased by the national operator under the state's pre-emptive right is determined by the subsurface user in accordance with the rules approved by the authorized body and is subject to expertise and approval by the authorized body.

6. Subsurface users who intend to alienate raw and (or) marketable gas shall send for examination to the authorized body calculations of the price of raw and (or) marketable gas purchased by the national operator under the pre-emptive right of the state, documented, no later than January 1 of the coming year.

7. Based on the results of the examination of calculations of the price of crude and (or) marketable gas purchased by the national operator under the pre-emptive right of the state, the authorized body, no later than thirty calendar days from the date of receipt of the materials, annually approves, with effect from July 1, the price of crude and (or) marketable gas purchased by the national operator under the pre-emptive right. the state, and sends a notification to the subsurface user on the approval of the price of crude and (or) commercial gas, or a reasoned conclusion on the need to change it.

8. Subsurface users are obliged to comply with the preferential right of the state.

9. Subsurface users who intend to alienate crude and (or) commercial gas shall send a commercial proposal to the national operator no later than five months before the start of the planned period, indicating:

1) volumes of alienated crude and (or) commercial gas;

2) the approved price of the alienated crude and (or) commercial gas;

3) the point of delivery of crude and (or) commercial gas.

10. The national operator, within one month from the date of receipt of the commercial offer, makes a decision on the implementation of the State's pre-emptive right or waiver of it, and within the same period, notifies the person who sent the commercial offer in writing of the decision.

11. If the national operator has refused in writing to exercise the state's pre-emptive right or has not sent a written notification of the intention to exercise it within one month, the owner of the commercial gas or the subsurface user has the right to alienate the raw and (or) commercial gas to other persons in accordance with the requirements of this Law.

12. Agreements between subsurface users and the national operator, concluded when the national operator exercises the pre-emptive right of the State, may be concluded for a period of more than one calendar year.

13. By agreement of the parties, amendments may be made to these agreements providing for an increase in the volume of crude and (or) commercial gas to be disposed of and (or) an extension of the validity period of the agreements, without following the procedures provided for in paragraphs 5-7, 9 and 10 of this article.

13-1. If in the following year the price of crude and (or) commercial gas purchased by the national operator under the pre–emptive right of the State has not changed by agreement of the parties, then contracts may be concluded without following the procedures provided for in paragraphs 5-7, 9 and 10 of this article.

14. The provisions of this article do not apply to cases of alienation:

1) crude gas produced in gas and (or) gas condensate fields;

2) commercial gas produced from crude gas produced at gas and (or) gas condensate fields;

3) liquefied natural gas and commercial gas obtained during its regasification;

4) crude gas sold in accordance with international treaties of the Republic of Kazakhstan;

5) commercial gas produced outside the territory of the Republic of Kazakhstan and imported for consumption into the territory of the Republic of Kazakhstan;

6) commercial gas produced outside the territory of the Republic of Kazakhstan from crude gas produced in the Republic of Kazakhstan on the basis of international treaties of the Republic of Kazakhstan;

7) commercial gas produced on the basis of a contract concluded within the framework of a partnership in the field of gas and gas supply;

8) crude and (or) marketable gas produced (produced) by a subsurface user under a production sharing agreement (contract) that has a stable tax regime in accordance with Article 722 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (Tax Code), the provisions of which provide for the preferential right of the state to purchase alienated crude and (or) commercial gas.

The Law of the Republic of Kazakhstan dated January 9, 2012 No. 532-IV.

This Law defines the legal, economic and organizational bases for regulating public relations in the field of gas and gas supply in the Republic of Kazakhstan and is aimed at creating conditions for meeting the domestic gas needs of the Republic of Kazakhstan, as well as for efficient, reliable and safe operation of gas supply facilities.

President

Republic of Kazakhstan

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