Get an Ofgem licence to supply, ship or transport gas

The Gas Act 1986 makes it an offence to supply gas through pipes, convey it to premises, arrange for a transporter to carry it, or take part in running a gas interconnector, unless a licence authorises you. Ofgem grants the licences, and the right one depends on what you do.

Work out which licence you need

A supply or shipper licence cannot be granted to a company that holds a transporter or interconnector licence. A supply licence covers the premises it names, and Ofgem treats supply to domestic and non-domestic premises, supply to non-domestic premises only, and supply to premises not served by a transporter's network as separate applications. To add premises later you apply for an extension.

The same Act also licenses providing the smart meter communication service and acting as code manager for a gas licence document. Both have their own application routes.

Check whether you are exempt

Schedule 2A to the Gas Act 1986 sets out activities that do not need a licence. You do not break the ban by:

• conveying or supplying gas within a building or part of a building you have an interest in, if a licensed supplier supplied the gas to the building
• conveying or supplying gas to premises occupied by your subsidiary or holding company, or by another subsidiary of your holding company
• conveying or supplying propane or butane, as long as a supply contract lets an authorised person enter the premises to avert danger on terms the Secretary of State has approved, and the gas does not travel through a public gas transporter
• conveying gas to premises that you reasonably expected, at any point in the previous 12 months, to take more than 75,000 therms a year
• supplying premises that will take more than 2,000,000 therms a year, if you notify Ofgem and it does not reply within six weeks saying it thinks the rate unlikely to be reached or that it cannot form a view

The Secretary of State can also grant exemptions by order, to named people or to a class of people. If none applies, you can ask the Department for Energy Security and Net Zero for an individual exemption.

Apply to Ofgem

An interconnector licence application costs £1,050.

Meet the licence conditions

Every licence comes with conditions. Standard conditions apply to all licensed companies, and Ofgem can amend them for one company or add special conditions that apply only to that company. Gas transporters also carry gas standard special conditions. Ofgem can modify standard conditions after publishing its proposals and allowing at least 28 days for representations.

You must also agree to follow the industry codes that govern your licensed activity, such as the Uniform Network Code, which sets the rules for gas transportation, and the Retail Energy Code.

If you cannot meet a condition without working against consumers' interests, you can ask Ofgem for a derogation, giving evidence of the impact on consumers, competition, health and safety or sustainable development. If you stop using a licence, you ask Ofgem to revoke it. Ofgem then publishes a notice of revocation giving 30 days' notice, and revocation cannot be reversed.

Get a safety case accepted if you transport gas

Your Ofgem licence and your accepted safety case are separate approvals, and you need both before you convey gas. The network must also have a sole emergency reporting service provider, and, where more than one person conveys gas in it, a sole network emergency co-ordinator.

What happens if you break the rules

You have 42 days from the date an order is served to challenge its validity in court.