In May 2025 the High Court declared that the National Energy Regulator has no authority to require licences under the Gas Act of 2001 for upstream gas production activities authorised under a valid production right issued in terms of the Mineral and Petroleum Resources Development Act of 2002.

The applicant sought clarity on whether it needed licences for the operation of its production and liquefaction plant and for trading in methane gas produced on-site. The court held that the Gas Act’s licensing regime does not apply to these activities when conducted as part of upstream production within the production area.

The court found that the definition of “gas” under the Gas Act refers only to hydrocarbon gases transported by pipeline, and that the Gas Act’s scope is limited to the piped gas industry. Because the gas in question was produced, treated, and liquefied on-site and not transported by pipeline beyond the production area, the regulatory reach of the Gas Act does not extend to the applicant’s operations.

The court also found that helium, being a noble gas, falls outside the definition of “gas” in the Act and is therefore not subject to regulation by the Gas Regulator under current legislation.

While the applicant had applied for and been granted licences by the Regulator, reportedly to meet investment-related requirements, it sought to have those licences set aside. The court declined to do so, noting that interested third parties (such as the applicant’s funders) had not been joined to the proceedings, a strange decision in the circumstances.

This decision affirms that where gas is produced and processed within the bounds of a production right, and is not transported by pipeline for distribution or into the national pipeline grid, it falls outside the Gas Act’s licensing requirements and does not fall under NERSA’s licensing regime. It also underscores the importance of correctly identifying the applicable regulatory regime for upstream vs mid- and downstream gas activities.

Tetra4 (Pty) Ltd v National Energy Regulator and Another [2025] ZAGPPHC 456