Licence number: Gala.tr.F1/1436/2009 LICENCE CONDITIONS FOR TRADING IN GAS BY NOVO ENERGY (PTY) LTD TABLE OF CONTENTS DEFINITIONS 2 CHAPTER ONE: LICENSED ACTIVITIES AND LICENSED AREAS... 3 CHAPTER TWO: GENERAL CONDITIONS... 7 CHAPTER THREE: SPECIFIC CONDITIONS... 10 ANNEXURES: Annexure A Annexure B Annexure C Licensed areas defined by Geographic Information System (GIS) grid (in map format) GPS coordinates for the Geographic Information System (GIS) grid defining the licensed areas (in table format) List of applicable standards, legislations and codes relevant to the storage, use and handling of compressed gases Disclaimer: The publication of these draft licence conditions for public comment should not be construed as a decision by the Energy Regulator to grant the licence applied for. The Energy Regulator does not accept any responsibility for any loss that may be sustained as a result of reliance by any person, company/organisation on the information contained in these draft licence conditions. NERSA-833-4020 Page 1 of 12
DEFINITIONS For the purpose of this licence and its conditions, any word or expression to which a meaning has been assigned in the Act and the Rules shall have the meaning so assigned, unless the context indicates otherwise. In these licence conditions, the following expressions shall have the following meanings:- Regulations means the Piped-Gas Regulations made in terms of section 34(1) of the Act. Piped Gas Regulations published under GN R321 in GG 29792 of 20 April 2007. Rules means Rules made by NERSA in terms of section 34(3) of the Act. the Act means the Gas Act, 2001 (Act No. 48 of 2001), and includes Regulations made in terms of the Act. NERSA means the National Energy Regulator established in terms of section 3 of the National Energy Regulator Act, 2004 (Act No. 40 of 2004). NERSA-833-4020 Page 2 of 12
CHAPTER ONE: LICENSED ACTIVITIES AND LICENSED AREAS 1 Licensed activities and licensed areas 1.1 NERSA issues the Licensee a licence to trade in gas in the following areas: (i) Meyerton of the Midvaal local Municipality; (ii) Durban of the ethekwini Metropolitan Municipality; (iii) Pietermaritzburg of the Msunduzi Local Municipality (iv) Germiston East of the Ekurhuleni Metropolitan Municipality (v) Pretoria of the Tshwane Metropolitan Municipality; (vi) Cottesloe of the City of Johannesburg Metropolitan Municipality; (vii) Welkom in the Matjhabeng Local Municipality; (viii) Virginia in the Matjhabeng Local Municipality; (ix) Theunissen in the Matjhabeng Local Municipality; (x) Ventersburg in the Matjhabeng Local Municipality; Gauteng province: i. City of Johannesburg Metropolitan Municipality; ii. iii. iv. City of Tshwane Metropolitan Municipality; Ekurhuleni Metropolitan Municipality; Emfuleni Local Municipality; v. Merafong City Local Municipality; vi. vii. viii. ix. Midvaal Local Municipality; Mogale City Local Municipality; Rand West City Local Municipality; and Lesedi Local Municipality; KwaZulu-Natal province: i. Amajuba District Municipality; ii. Alfred Duma District Municipality; iii. ethekwini Local and District Municipality; iv. ilembe District Municipality; v. the Msumdizi Local Municipality; NERSA-833-4020 Page 3 of 12
vi. Ray Nkonyeni Local Municipality; vii. Ugu District Municipality; viii. Umgungundlovu District Municipality; ix. Umsinyathi District Municipality; x. Uthukela District Municipality; xi. Umthungulu District Municipality; xii. Umkhanyankude District Municipality; and xiii. Zululand District Municipality. Free State province i. Matjhabeng Local Municipality; and ii. Metsimaholo Local Municipality. North West province i. Bojanala Platinum District Municipality; ii. Dr Kenneth Kaunda District Municipality; iii. Madibeng Local Municipality; iv. Ngaka Modiri Molema District; and v. Rustenburg Local Municipality. Limpopo province i. Capricorn District Municipality; ii. Sekhukhune District Municipality; and iii. Waterberg District Municipality. Mpumalanga province i. Dipaleseng Local Municipality; ii. Ehlanzeni Local Municipality; iii. Emalahleni Local Municipality; iv. Gert Sibande District Municipality; v. Goven Mbeki Local Municipality; vi. Mbombela Local Municipality; vii. Nkangala District Municipality; viii. Steve Tshwete Local Municipality; and NERSA-833-4020 Page 4 of 12
ix. Victor Khanya Local Municipality. Western Cape province i. City of Cape Town Metropolitan Municipality Eastern Cape province i. Alfred Nzo District Municipality; and ii. Nelson Mandela Bay District Municipality. as indicated in Annexure A and demarcated by the GPS coordinates in Annexure B hereto. 1.2 The Licensee must furnish NERSA with the required gas specifications prior to commencement of its trading activities, in such form and manner as NERSA may require. 1.3 This trading licence only applies to the gas specifications as approved by NERSA. 1.4 The Licensee must carry out these activities in a manner consistent with the provisions of the Act. 1.5 The Licensee must commence with the trading activities contemplated in 1.1 above within twenty four months of receiving a positive record of decision from the relevant environmental authorities in each licensed area. 1.6 The Licensee may not assign this licence to another party. 2 Duration of licence 2.1 This licence is valid for a period of twenty five years from the date of issue, unless revoked in accordance with the provisions of the Act. NERSA-833-4020 Page 5 of 12
2.2 The Licensee may apply to have its licence renewed subject to the provisions of the Act. NERSA-833-4020 Page 6 of 12
CHAPTER TWO: GENERAL CONDITIONS 3 Amendment of licence This licence may be amended in accordance with the Act and the Rules. 4 Revocation of licence This licence may be revoked by NERSA in accordance with the provisions of the Act. 5 Compliance 5.1 The Licensee must comply with the conditions of this licence, the Act and the Rules. 5.2 The Licensee must comply with the applicable standards, legislations and codes relevant to the storage, use and handling of compressed gases including those listed in Annexure C. 5.3 This licence is granted only in terms of the Act and for the activities specified and described in 1.1 above. This licence does not exempt the Licensee from compliance with any other legislation. 6 Changes in the details of the Licensee 6.1 The Licensee must notify NERSA if the control of the Licensee, as contemplated in section 12(2) of the Competition Act, 1998 (Act No. 89 of 1998), changes. 6.2 The Licensee must provide NERSA with details of any changes in its registered name, operating or trading name, registered address and other NERSA-833-4020 Page 7 of 12
contact details, including but not limited to the names, telephone numbers, facsimile numbers and email addresses of contact persons. 6.3 The notifications contemplated in 6.1 and 6.2 above must be provided within fourteen days of the event giving rise to them. 7 Entry, inspection and gathering of information The Licensee must permit any authorised person, at all reasonable times, to enter and inspect any property on which a licensed activity is taking place, and inspect any facility, equipment, machinery, book, account or other document and gather any information in accordance with the Act and the Rules. 8 Participation of Historically Disadvantaged South Africans 8.1 The Licensee must annually provide NERSA with the information regarding Historically Disadvantaged South Africans as prescribed in the Regulations. 8.2 The Licensee must submit the information contemplated in 8.1 above to NERSA within thirty days of its financial year end. 9 Transaction recording and Regulatory Financial Reporting 9.1 The Licensee must keep detailed records of all gas trading transactions and agreements entered into. 9.2 The Licensee must maintain separate accounts for its gas trading activities and compile gas trading data separately from any other accounts or data collection. These separately maintained accounts must be prepared in accordance with the Regulatory Reporting Manuals as prescribed by NERSA. NERSA-833-4020 Page 8 of 12
9.3 The Licensee must comply with the requirements on Regulatory Financial Reporting as prescribed by NERSA in the Regulatory Reporting Manuals. 10 Monitoring and provision of information 10.1 The Licensee must keep records relating to the compliance or noncompliance with the conditions of this licence. 10.2 The Licensee must make the records referred to in 10.1 above available to NERSA within fourteen days of receipt of a written request for such records. 10.3 The Licensee must provide NERSA with reports indicating the progress made in terms of executing the licensed activities in each area, every six months, from the date of issue of the licence. 10.4 The Licensee must furnish NERSA with information in such form and manner and at such times as NERSA may require in the performance of its duties or functions under the Act. 10.5 The information that the Licensee must furnish NERSA with must include, but is not limited to, the following (a) the full name, physical address of, and annual volume supplied to each refueling station for natural gas vehicles (in Gigajoules of gas per annum) and average charge (in Rands per Gigajoule of gas) for that financial year. (b) for each of the Licensee s customers, other than those in (a) above, who consume less than ten million Gigajoules of gas per annum, the full name, physical address, annual volume supplied (in Gigajoules of gas per annum) and average charge (in Rands per Gigajoule of gas) for that financial year. (c) detailed audited annual financial statements, consisting of a balance sheet, income statement and cash flow statement for the licensed NERSA-833-4020 Page 9 of 12
activity. This information must be furnished within six calendar months of the end of the Licensee s financial year. 10.6 The data supplied by the Licensee in terms of 10.5(a) and (b) above must (a) (b) (c) (d) be limited to gas; separately reflect actual prices and tariffs, as well as any other charges paid by the end-consumer excluding taxes; include meter rental, standing charge and the initial installation charge to the customer, where applicable; and be reported in Rands per Gigajoule of gas. 10.7 The information contemplated in 10.5 (a) and (b) must be furnished within three calendar months of the end of the Licensee s financial year. 11 Correspondence 11.1 All official communication by the Licensee with NERSA must be in writing, signed and addressed to NERSA. 11.2 The Licensee must in all correspondence with NERSA quote the licence reference number as it appears on this licence certificate. CHAPTER THREE: SPECIFIC CONDITIONS 12 Advisory service to customers on safety, efficient use, handling and storage of gas 12.1 The Licensee must provide an advisory service, as approved by NERSA, to customers other than Eligible Customers on the safe and efficient use, handling and storage of gas. NERSA-833-4020 Page 10 of 12
12.2 The advisory service to customers must include, but is not limited to, the provision of the following information- (a) (b) (c) information on the technical specifications and chemical properties of gas relevant to its use; the proper procedure for the reporting of gas leaks or equipment defects; and safety procedures to be followed and the appropriate dedicated telephone numbers to call in case of an emergency, at any hour on any day. 13 Pricing 13.1 The Licensee must not charge prices above the maximum prices approved by NERSA. 13.2 The Licensee must within three months of the date of issue of the licence and whenever requested by NERSA thereafter, provide sufficient information as required by NERSA for it to determine maximum prices. 13.3 When gas is sold, the Licensee must, in the accompanying sales invoice: a) itemise the constituent elements of the total price reflected on the invoice, including at least the cost of gas, any transport tariffs and any other charges; and b) for customers who receive gas at a refuelling station or, where applicable, different sources of gas are used to serve a particular customer or customers, the cost of gas stated in (a) above may be estimated by means of an average cost of gas. 13.4 The invoices issued by the Licensee to customers (and consumers) must indicate:- NERSA-833-4020 Page 11 of 12
(a) (b) the acquisition or production cost of the gas; and details of all tariff charges applied, including metering and other charges. 14 Non-discrimination The Licensee may not discriminate between customers or classes of customers regarding access, tariffs, prices, conditions or service, except for objectively justifiable and identifiable differences regarding such matters as quantity, transmission distance, length of contract, load profile, interruptible supply or other distinguishing feature approved by NERSA. 15 Whole licence This licence constitutes the entire licence and supersedes all prior understandings and agreements between NERSA and the Licensee. NERSA-833-4020 Page 12 of 12