Law Updates

Subject

Summary: The Petroleum and Natural Gas Regulatory Board (PNGRB) has notified the Petroleum and Natural Gas Regulatory Board (Affiliate Code of Conduct for Entities Engaged in Marketing of Natural Gas and Laying, Building, Operating, or Expanding Natural Gas Pipeline) Amendment Regulations, 2026. Through this amendment, PNGRB has omitted Regulation 5A of the 2008 Regulations, which earlier required entities engaged in both natural gas marketing and pipeline transportation to establish separate legal entities for their transportation business. The amendment removes the requirement for a separate legal entity for these activities, but the wider regulatory requirements under the PNGRB Act, 2006, continue to apply. Natural gas companies should review the change carefully, and assess how it may affect their business structure, affiliate arrangements and existing compliance responsibilities. What Did Regulation 5A Require Earlier? Before this amendment, Regulation 5A required entities engaged in both natural gas marketing and pipeline transportation to establish a separate legal entity for their transportation business. The requirement was introduced to promote fair competition, improve transparency in pipeline operations and maintain arm's length transactions between transportation and marketing activities. With the 2026 amendment, PNGRB has removed this mandatory legal separation requirement by omitting Regulation 5A. What Has Changed Under the PNGRB Amendment Regulations, 2026? The latest amendment makes a targeted change by removing the provision that mandated legal separation between natural gas marketing and transportation businesses. Earlier Position Revised Position Regulation 5A required entities carrying out both marketing and transportation activities to create separate legal entities. Regulation 5A has been omitted from the 2008 Regulations. Mandatory legal separation was prescribed for integrated entities. The specific legal separation requirement no longer applies under the Affiliate Code of Conduct Regulations. Transportation activities were required to be undertaken through a separate legal entity. The amendment removes this mandatory restructuring requirement. Corporate restructuring was part of regulatory compliance under Regulation 5A. Businesses should continue complying with all other applicable PNGRB regulations. How Does the Amendment Affect Natural Gas Businesses? The omission of Regulation 5A changes the way certain natural gas entities can approach their organisational structures. Businesses can now review existing arrangements and assess whether any operational or governance changes are required. 1. Greater Flexibility in Business Structure Entities engaged in both natural gas marketing and pipeline transportation are no longer required to maintain separate legal entities under Regulation 5A. This gives businesses more flexibility when planning their corporate structure. 2. Existing Compliance Obligations Continue Removing the legal separation requirement does not mean that other PNGRB obligations no longer apply. Natural gas entities must continue following the PNGRB Act, Affiliate Code of Conduct and other applicable rules related to their operations. 3. No Need for Mandatory Entity Separation Companies that were earlier required to create separate legal entities under Regulation 5A will no longer have to maintain that structure only because of this provision. However, they should review their current arrangements to ensure they remain compliant with other regulatory, contractual and operational requirements. Key Compliance Considerations for Businesses Companies can now review their existing structures with greater flexibility, but other PNGRB obligations and compliance requirements will remain applicable. Companies should examine their current business structure and determine whether any changes are required after the amendment. Existing obligations under the Affiliate Code of Conduct will continue to apply, including requirements related to fair practices and transparency. Businesses should review affiliate transactions and internal processes to ensure they remain properly documented and compliant. Existing transportation and marketing agreements may need to be checked for clauses that were based on the earlier entity separation requirement. Companies should keep track of further PNGRB updates that may clarify the implementation of this amendment. Detailed Compliance Requirements Under the PNGRB Amendment Regulations, 2026 The amendment removes a specific regulatory requirement, but businesses should review its impact on their existing compliance framework. The key compliance requirements are outlined below. 1. Omission of Regulation 5A PNGRB has formally omitted Regulation 5A from the Affiliate Code of Conduct Regulations, 2008. The provision requiring mandatory legal separation has been removed. Regulation 5A is no longer part of the Affiliate Code of Conduct. The amendment is effective from the date of its publication in the Official Gazette. The change applies to entities engaged in both natural gas marketing and pipeline transportation. Business Impact Businesses are no longer required to maintain separate legal entities solely under Regulation 5A. Existing corporate structures may be reviewed based on commercial and regulatory considerations. 2. Removal of Mandatory Legal Separation The amendment eliminates the requirement for integrated entities to separate their marketing and transportation businesses into different legal entities. Mandatory corporate restructuring is no longer prescribed under the regulations. Integrated business models are no longer restricted by Regulation 5A. Companies have greater flexibility in determining their organisational structure. Business Impact Businesses can reassess existing legal structures. Future restructuring decisions can be driven by operational and commercial needs rather than this regulatory requirement. 3. Integrated Energy Companies Companies involved in multiple activities across the natural gas sector may see a direct impact from the amendment. Key Points Integrated businesses combining transportation, marketing or related activities can review their existing models. Companies may reassess internal divisions, subsidiaries or separate entities created due to earlier requirements. Organisational structures can be evaluated based on efficiency, investment plans and business strategy. Regulatory compliance responsibilities continue across all authorised activities. Business Impact Integrated companies may identify opportunities to reduce administrative complexity. Businesses can consider more flexible approaches for future projects and investments. Corporate restructuring decisions can be aligned with operational priorities. 4. No Automatic Changes to Existing Authorisations The amendment does not automatically modify existing authorisations, approvals or permissions granted by PNGRB. Existing authorisations for pipeline transportation and natural gas marketing activities remain governed by their respective terms and conditions. Businesses must continue meeting operational, safety and reporting obligations. Any structural changes should be evaluated with respect to applicable PNGRB requirements. Entities should maintain proper documentation supporting their compliance position. Business Impact Companies should avoid assuming that the amendment results in automatic regulatory relaxation across all areas. Internal compliance reviews can help identify whether any modifications are required. Proper documentation will remain important during regulatory inspections or reviews. 5. Recommended Compliance Actions for Businesses Businesses operating in the natural gas sector should assess the amendment and determine whether any internal changes are required. Review existing corporate structures and compliance arrangements. Evaluate whether separate legal entities are still required from a business perspective. Update compliance manuals, regulatory trackers and internal policies. Consult legal and regulatory advisors before implementing structural changes. Monitor further PNGRB notifications or amendments affecting natural gas operations. Business Impact A proactive compliance review can help businesses identify cost-saving opportunities. Companies can align their operational structure with current regulatory requirements. Timely assessment reduces the risk of outdated compliance practices. Industries and Businesses Likely to Be Affected The amendment mainly impacts companies engaged in natural gas marketing, pipeline transportation, and related energy activities. Businesses engaged in these areas must evaluate how the change may impact their existing structures and compliance approach. 1. Natural Gas Marketing Companies Companies involved in natural gas marketing can reassess their existing organisational structures. Businesses may review whether separate legal entities are still required for operational purposes. Compliance with other PNGRB regulations and authorisation conditions will continue. 2. Pipeline Transportation Entities Pipeline operators may evaluate the impact of the amendment on their existing arrangements. Any structural changes should consider authorisation conditions, safety obligations and regulatory requirements. Businesses must continue meeting applicable operational and reporting obligations. 3. Integrated Natural Gas Companies Companies involved in both marketing and transportation activities may review their current business models. Existing subsidiaries, divisions or governance structures can be reassessed. Future restructuring decisions may be based on commercial and operational needs. 4. New Market Participants New entrants may have more flexibility in choosing their business structure after the amendment. PNGRB approvals and other regulatory requirements will continue to apply before starting regulated activities. Businesses should assess compliance requirements, while planning their entry into the natural gas sector. 5. Compliance and Legal Teams Internal policies, and compliance documents should be updated where Regulation 5A references exist. Regulatory trackers and checklists should reflect the amended framework. Businesses should maintain records of compliance assessments. Commercial and Operational Impact on Businesses The amendment provides greater flexibility to natural gas entities while reviewing their organisational and operational structures. Flexibility in Business Structures Companies can reassess whether separate legal entities are required for marketing, and transportation activities. Businesses may review existing governance models based on operational, and commercial needs. Future restructuring decisions can be planned with greater flexibility. Continued Regulatory Responsibilities Other PNGRB compliance requirements, authorisations and operational obligations will continue to apply. Businesses should update internal policies and review compliance frameworks where required. Any structural changes should be assessed before implementation. Compliance Checklist for Businesses Businesses affected by the PNGRB Amendment Regulations 2026 should review their existing arrangements and update compliance practices accordingly. Key Compliance Actions Review existing corporate structures linked to natural gas marketing and transportation activities. Identify internal documents or policies referring to Regulation 5A and update them where required. Assess whether any restructuring or operational changes are commercially beneficial. Continue monitoring PNGRB regulations, authorisation conditions and reporting requirements. Maintain records of compliance reviews and internal assessments. A timely review will help businesses align their operations with the revised regulatory framework. Corpseed Offering: Supporting Businesses with PNGRB Compliance Changes The removal of the mandatory legal separation requirement may give natural gas companies more flexibility in structuring their operations. However, businesses will still need to review their regulatory position, internal arrangements and compliance processes. Corpseed helps natural gas companies assess the impact of regulatory changes and adapt their compliance framework accordingly. 1. PNGRB Regulatory Impact Assessment Help businesses understand how the amendment affects their existing structure, affiliate arrangements and regulatory obligations under the PNGRB framework. 2. Business Structure and Compliance Review Review existing legal entities, operational models and internal processes to identify whether any changes are required after removal of the Regulation 5A requirement. 3. Affiliate Code of Conduct Advisory Support companies in reviewing affiliate transactions, internal controls and compliance practices to ensure continued alignment with PNGRB requirements. 4. Agreement and Documentation Review Assist in examining relevant agreements, policies and compliance documents that may require updates due to changes in the regulatory framework. 5. Regulatory Compliance Support Provide ongoing guidance on PNGRB regulations applicable to natural gas marketing, transportation and related activities. 6. Regulatory Updates and Monitoring Track PNGRB notifications, amendments and policy developments to help businesses stay informed about future compliance changes. 7. Internal Compliance Guidance and Support Assist compliance and legal teams in understanding regulatory changes and implementing necessary internal measures across business functions. Need Expert Guidance on PNGRB Compliance? Whether you're reviewing your corporate structure or assessing the impact of the latest PNGRB amendment, Corpseed's regulatory experts can help you understand your obligations and maintain compliance with the evolving natural gas regulatory framework. Contact us today for expert guidance.