Amendment of the Gas Supply Legislation

05.09.2013

Legal Update No. 435, 5 September 2013

Goltsblat BLP advises that RF Government Resolution No. 679 of 8 August 2013 "On Amending and Invalidating Certain RF Government Acts Concerning Aspects of Gas Supply" came into effect on 17 August 2013.

The given Resolution cancels the need for permits to use gas as fuel (the "gas as fuel regime").

Please note that a permit to use gas as fuel was previously a necessary and basic document granting a real estate developer/owner the right to make such use.

The permit was issued at the level of federal executive authorities or, depending on the annual amount of natural gas consumed, executive authorities of the constituent entities of the Russian Federation, and in coordination with Open Joint Stock Company Gazprom. The new Resolution supersedes RF Government Resolution No. 832 "On the Procedure for Specifying the Type of Fuel for Enterprises and Fuel-consuming Units" of 29 October 1992.

It should, however, be noted that joint Order No. 333/358/101 of the Ministry for Economic Development and Trade, the Power Ministry of the Russian Federation and Open Joint Stock Company Gazprom of 15 October 2002 "On Approval of the Procedure for Formulating Decisions Specifying Types of Fuel for Enterprises and Fuel-consuming Units and the List of Gas-consuming Equipment not Requiring Special Permits to Use Natural Gas" continues unchanged (the Order still regulates the procedure for issuing permits to use natural gas as fuel).

It is evident that the changes are of major significance for real estate developers/owners from the point of view of cutting their requisite costs of obtaining gas-related permits and authorisations.

Yet it is not clear how practical application of the given changes will subsequently develop.

If you have any question or would like more detailed information, please contact: Vitaly Mozharowski, Partner, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Vitaly.Mozharowski@gblplaw.com; or Yuri Chernobrivtsev, Partner, Real Estate & Construction, Goltsblat BLP, by phone +7 495 287 44 44, or by e-mail Yuri.Chernobrivtsev@gblplaw.com; or Ekaterina Verle, Head of Group, Real Estate and Construction Practice, Goltsblat BLP by tel.: +7 495 287 44 44, or e-mail: Ekaterina.Verle@gblplaw.com.

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