Why Empresa Colombiana De Gas, Ecogas, The Vice Ministry Of Hydrocarbons Is Created And Other Provisions

Original Language Title: Por la cual se crea la Empresa Colombiana de Gas, Ecogas, el Viceministerio de Hidrocarburos y se dictan otras disposiciones

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1997 401 ACT

(August 20)

Official Journal No. 43,114 of 26 August 1997

By which the Colombian Gas Company, Ecogas, the Viceministerium of Hydrocarbons and other provisions are created.

Vigency Notes Summary

THE CONGRESS OF COLOMBIA,

DECRETA:

ARTICLE 1o. CREATION. Create a decentralized entity of the national order, linked to the Ministry of Mines and Energy with the character of Industrial and Commercial Enterprise of the State, with legal personality, administrative autonomy, financial and patrimonial, that be referred to as the Colombian Gas Company and may use the acronym Ecogas, entity that shall be governed by the provisions of this law, by the statutes adopted and approved by the Board of Directors and subject to the regulation, supervision and control of the authorities competent.

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ARTICLE 2o. OBJECT. 1o of Decree 1175 of 1999. > The Colombian Gas Company, Ecogas, will have as its object the planning, organization, expansion, maintenance, operation and commercial exploitation of the natural gas transportation systems of its own. It may also commercially exploit the capacity of third-party natural gas pipelines for which an availability tariff is paid, or for agreements with them. Ecogas will manage the Natural Gas Transport Coordination Center, CTG.

In order to comply with its object, the company may conclude all the acts and contracts which, subject to the legal rules, provide for its statutes.

The Natural Gas Transportation Coordination Center, CTG, will be established and operated as a functionally independent unit within the Ecogas structure. The competent authorities shall take the necessary measures to ensure that the CTG operates in a non-discriminatory manner for the benefit of the National Natural Gas Transport System.

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ARTICLE 3o. 1o. Decree 1175 of 1999 states: "... the rules of Law 401 relating to the Centre which are deleted shall be repealed, as appropriate." The original text of the article is as follows: > The functions of the Natural Gas Transportation Coordination Center, CTG, will be as follows:

a) Plan, monitor and coordinate gas transportation through the National Natural Gas Transportation System;

b) Receive and process natural gas transport nominations from the System;

c) Assign the transport capacity to each of the senders, depending on the type of service contracted and the operating conditions of the System;

d) Plan and ensure maximum System capacity at all times;

e) Ensuring System Security and Reliability;

f) Ensure the quality of the transport service;

g) Ensure strict compliance with relevant regulations and regulations;

h) Act as a coordinating entity in emergency cases;

i) Other functions that you assign to the law and regulations.

PARAGRAFO 1o. The Natural Gas Transport Coordination Center, CTG, will use all the information provided by the Main Centers of Control, CPC, belonging to the different pipelines that do of the National System of Natural Gas Transportation, by the Center of Electrical Dispatch, CND and by the compressor stations, among others, to ensure that the integrated operation of said System is timely, economical, safe and realized on the principle of free access and non-discrimination.

PARAGRAFO 2o. The Natural Gas Transport Coordination Center, CTG, will have a Director who must meet the following conditions:

a) Being Colombian and a citizen in exercise;

b) Poseer university degree and postgraduate studies;

c) Contar with a recognized technical preparation and experience not less than five (5) years in the area of hydrocarbons or energy.

PARAGRAFO 3o. All the infrastructure of the National Natural Gas Transport System must comply with the operational rules and conditions set by the competent authorities directly or through the Coordination of Natural Gas Transportation, CTG.

The Energy and Gas Regulatory Commission will establish these operating rules and conditions through the "Single Natural Gas Transport Regulation".

PARAGRAFO 4o. Autoricese the creation of a Main Control Center, CPC, for the Subsystem of Transportation of the Plains which will be located in the city of Yopal, Casanare, when the technical conditions so require.

PARAGRAFO 5o. The headquarters of the Natural Gas Transport Coordination Center, CTG, will have its registered office in the city of Bucaramanga.

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ARTICLE 4. 1o of Decree 1175 of 1999. > Create the National Council of Operation of Natural Gas, CNO, which, as an advisory body of the Center for the Coordination of Natural Gas Transport, CTG, will have as its function make recommendations to ensure that the integrated operation of the National System of Natural Gas Transportation is safe, reliable and economical. The National Natural Gas Operation Council will have a Technical Secretary who will also be the Director of the Natural Gas Transportation Coordination Center, CTG.

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ARTICLE 5o. 1o of Decree 1175 of 1999. > The National Council of Operation CNO will be made up of: one (1) representative of the Ministry of Mines and Energy, who will chair it; by four (4) representatives of the (1) for each 25% of the total gas production in the country; for four (4) representatives of the senders at the rate of one (1) for each 25% of the country's total demand, two (2) of them representatives of the sector thermoelectric, by one (1) representative of the National Centre for Electrical Dispatch; by the Director of Natural Gas Transportation Coordination Center, CTG.

PARAGRAFO. Equally, they will have a seat on the National Gas Operation Council, CNO, representatives of natural gas transportation systems that have a capacity of more than 50 million cubic feet per day.

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ARTICLE 6o. 1o of Decree 1175 of 1999. > The National Gas Operation Council, CNO, will develop its activities in coordination with the companies producing and distributing natural gas, with the Center National of Electrical Dispatch and with the Gas Transportation Coordination Center, CTG.

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ARTICLE 7o. DOMICILE AND DURATION. The Colombian Gas Company, Ecogas will have its registered office in the city of Bucaramanga, and its duration will be indefinite.

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ARTICLE 8o. CAPITAL AND EQUITY. Escindense of the assets of the Colombian Petroleum Enterprise, Ecopetrol, the assets and rights related to the activity of natural gas transportation, as well as the rights derived from contracts relating to natural gas activity, for the formation of the initial patrimony of Ecogas.

For this purpose, the National Government is authorized to determine, within three (3) months of the term of this law, the assets to be delivered, the contracts to be transferred, and the legal relationships that arise between Ecopetrol and Ecogas related to construction, operation, maintenance and transfer contracts ('BOMT ') Among others, Cali-Mariquita and Ballena-Barrancabermeja and with the concession Sebastopol-Medellin and the others to take place in the process of division.

Ecopetrol will spin off the assets linked to the natural gas transport activity by the value in books of the same at the time of delivery. For the purposes of the accounting and financial incorporation of such assets to the Ecovas estate, it shall be valued in accordance with a methodology that ensures the financial viability of the company. In any event, such valuation may not exceed 80% of the value of the respective assets in Ecopetrol's books. The difference will be assumed by the Nation and will be revealed in its balance sheet.

The heritage of the Colombian Gas Company, Ecogas can be integrated, as well as:

(a) The goods and rights that the Nation, the decentralized entities territorially or by services, of any order, transfer to any title;

b) Goods resulting from investments and reinvestments of profits that correspond to the Company according to legal standards;

(c) Other assets that the Company acquires for any title.

PARAGRAFO. For the purpose of the recognition by Ecogas of the economic contracts to which Ecopetrol is entitled to assume the payment of all the obligations arising from the service contracts for the transport of natural gas referred to in paragraph 2 of this Article, the two entities shall design a payment scheme which does not exceed 80% of the value present Neto, (V.P.N.), of those obligations and which guarantees profitability and viability financial of Ecogas.

Ecopetrol will cede to Ecogas the purchase option rights it has in construction, operation, maintenance and transfer contracts ("BOMT") Among others, the Cali-Mariquita and Ballena-Barrancabermeja pipelines.

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ARTICLE 9o. MANAGEMENT AND ADMINISTRATION BODIES. The Company will have a Board of Directors that will exercise the functions that the statutes indicate and will be made up of the Minister of Mines and Energy, who will preside over it, or the Deputy Minister of Hydrocarbons, who shall be his alternate, by the Minister of Finance and Public Credit or his delegate, and by five (5) members with their respective alternates, who shall be appointed by the President of the Republic, of whom two (2) members shall belong to the producing regions and two (2) to the consuming regions.

The Company's administration will be in charge of a President, who will have his legal representation and will be an agent of the President of the Republic, of his free appointment and removal. The functions of the President of the Company shall be defined in the statutes.

PARAGRAFO. The President of the Republic shall designate the members of the Board of Directors of the Company other than the Ministers of Mines and Energy and Finance and Public Credit and their alternates, within thirty (30) days following the publication of this law.

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ARTICLE 10. The Colombian Gas Company, Ecogas, together with the Colombian Petroleum Enterprise, Ecopetrol, will form a business group that will be led by the latter in the terms of the article. 28 of Law 222 of 1995.

The business group will have as its sole object the coordination of the industrial and commercial activities of the two companies and will not generate a business unit for any legal effect.

The Boards of the two entities, within six (6) months, counted from the validity of this law, in their respective statutes, shall adopt the provisions and measures that develop the provisions of this Law. Article.

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ARTICLE 11. For the purpose of ensuring an efficient delivery of the public gas service, fuel that is transported by physical network to all users of the national territory, activities other than your exploration. exploitation and processing, will be governed by the provisions contained in Law 142 of 1994.

PARAGRAFO 1o. Crude oil exploration, exploitation, processing, and transportation activities, as well as their derived products, will not be subject to the rules of Law 142 1994. Such activities shall continue to be governed by the special rules contained in the Code of Petroleum, Decree 2310 of 1974 and the provisions which supplement, add or reform them.

PARAGRAFO 2o. The competencies provided for in Law 142 of 1994 relating to the public, commercial and industrial service of fuel gas will only be preached in the cases in which gas is actually used as fuel rather than as raw material for industrial petrochemical processes.

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ARTICLE 12. EMPLOYMENT REGIME. The persons who provide their services in Ecogas, with the exception of the President of Ecogas, will have the quality of official workers and will be subject to the legal regime provided for this category of public servants.

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ARTICLE 13. Crease with resources from Ecopetrol, the Casanare Training and Research Institute, for the training of technical personnel specialized in the industry of the hicrochares, particularly in Yopal-based exploration, drilling and transportation technologies, Casanare. Such an institution may conclude agreements for the administration and development of programmes that are competent for public and private entities in these areas.

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PARAGRAFO. When conditions require, the training institution, referred to in this article, may adopt training programs in areas other than those already mentioned, in agreement with the SENA or other public or private entities.

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ARTICLE 14. Authorize the National Government to adopt, by decree, the measures of a budgetary nature that are necessary to ensure the operation, commercial operation and investments Ecogas initials.

TRANSIENT PARAGRAPH. Within six (6) months of the entry into force of this law, the National Government shall determine the priority investments for the transportation of natural gas required in the areas of derogation provided for in Law 218 of 1995.

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ARTICLE 15. In order to promote and co-finance projects aimed at the development of infrastructure for the use of natural gas in municipalities and the rural sector, as a priority within the influence of the trunk pipelines, and having the highest rate of unmet Basic Needs (NBI), create a special fund, managed and managed by the Board of Ecogas, whose resources will come from a promotion fee, which will be one and a half percent (1.5%) <3%> on the value of the tariff charged for the gas object of the transport, effectively carried out.

All natural or legal persons who are senders of the National Natural Gas Transport System shall be subject to the quota set out in this Article.

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ARTICLE 16. PRIORITIES FOR THE SUPPLY OF NATURAL GAS. Where there are insurmountable restrictions on the supply of natural gas or situations of serious emergency, non-transitory, which prevent a minimum supply of demand, the Government National, according to the orders, and parameters established in Law 142 of 1994, and prior to the National Council of Operation of Gas, will fix the order of priority attention in question, taking into account the effects on the population, the electricity generation needs, duly improved contracts, as well as all criteria for a balanced solution of consumption needs in the region or regions concerned.

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ARTICLE 17. Create the Hydrocarbon Viceministerium which will have the following functions:

(a) Collaborate in the formulation of policies or action plans of the hydrocarbon sub-sector, under the direction of the Minister;

b) to coordinate the course of the bills related to the hydrocarbon subsector, for which it will assist the Minister in the elaboration of such projects and in their constitutional process and coordinate the attention of the subpoenas to the Congress of the Republic;

c) Velar, together with other authorities, for compliance with the rules on protection, conservation, preservation of natural and environmental resources developed by the hydrocarbon sector;

d) Substitute the temporary faults of the Minister, when so decided by the President of the Republic;

e) Prepare reports on hydrocarbon sector plans and programs to be submitted to the National Planning Department and other public authorities;

f) The others assigned to you by the Minister of Mines and Energy or the legal provisions.

PARAGRAFO. The Deputy Minister of Hydrocarbons will be the alternate of the Minister of Mines and Energy in the Board of Directors of the industrial and commercial companies of the State in the subsector of hydrocarbons, as they are Ecopetrol and Ecogas.

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ARTICLE 18. VALIDITY. This law governs from the date of its publication and repeals all provisions that are contrary to it.

The President of the honorable Senate of the Republic,

AMYLKAR ACOSTA MEDINA.

The Secretary General of the honorable Senate of the Republic,

PEDRO PUMAREJO VEGA.

The President of the honorable House of Representatives,

CARLOS SQUIRLA BALLESTEROS.

The Secretary General of the honorable House of Representatives,

DIEGO VIVAS TAFUR.

COLOMBIA-NATIONAL GOVERNMENT

Publish and execute.

Dada in Bucaramanga, 20 August 1997.

ERNESTO SAMPER PIZANO

The Minister of Finance and Public Credit,

JOSE ANTONIO OCAMPO GAVIRIA.

The Minister of Mines and Energy,

RODRIGO VILLAMIZAR ALVARGONZÁLEZ.

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