High Court clarifies regulatory scope of Gas Act in Tetra4 v NERSA

Legal Update: Environmental, May 2025

In the case of Tetra4 (Pty) Ltd v National Energy Regulator of South Africa and the Minister of Mineral Resources and Energy [2025] ZAGPPHC (2 May 2025), the Pretoria High Court considered the regulatory scope of the Gas Act (Act 48 of 2001) in relation to upstream gas production authorised under a production right granted in terms of section 84 of the Mineral and Petroleum Resources Development Act (Act 28 of 2002) (MPRDA). 

Tetra4 sought declaratory relief to the effect that it did not require licences under section 15(1)(b) (operation of liquefaction facilities) and section 15(1)(c) (trading in gas) of the Gas Act for its Virginia Gas Project, as its activities constituted upstream petroleum operations, not midstream or downstream piped gas activities. 

The Court held that the Gas Act applies exclusively to hydrocarbon gases transported by pipeline and regulates only midstream and downstream activities such as transmission, storage, liquefaction (as defined in section 1), and trading. The Court found that Tetra4’s closed-loop, on-site gas-gathering system and liquefaction process—integral to helium extraction—constituted part of the production process and did not fall within the ambit of section 15.

The Court also confirmed that helium, being a noble gas, is excluded from the definition of "gas" under section 1 of the Act.

Accordingly, the Court confirmed that the licensing provisions of the Gas Act do not apply to Tetra4’s operations. However, the Court declined to set aside existing NERSA-issued licences due to the absence of affected third parties with a direct interest.

This judgment affirms the limited application of the Gas Act to the piped gas industry and underscores the principle that upstream production activities remain subject to the MPRDA and outside NERSA’s regulatory jurisdiction under the current legislative framework.