State-owned operator Egyptian Natural Gas Holding Company (Egas) is on target to establish an independent gas operator before the end of August, according a source with knowledge of Egas operations.

“Establishing the regulator as an independent entity is dependent on the passage of the new gas law,” said the source. “If the law is passed soon the regulator should be formed before the end of August.”

The formation of the independent gas regulator is part of an energy sector reform package, which was unveiled at the Egypt Economic Development Conference (EEDC) in March, with the aim of increasing investor confidence in the sector.

The independent regulator will be responsible for the development and application of gas network codes, third-party access, transportation tariffs, as well as licensing and monitoring. The chair of the gas regulator will be selected from outside the government.

As of March 2015, a shadow regulator within Egas had been established for six months and plans were being devised to transform it into a full independent regulator.

It has not yet been decided whether the regulator will report to the Oil Ministry or the cabinet, according to the source.

Egypt’s electricity and water regulators currently report to their respective ministries, but there are ongoing discussions as to whether the new gas regulator should report directly to the cabinet in an effort to give the institution greater credibility.

Delays to Egypt’s parliamentary elections have introduced an element of uncertainty to whether the gas law will be passed in time.

Elections were planned for 22 March, but they did not take place after Egypt’s Supreme Constitutional Court ruled that the laws governing the election were unconstitutional.

According to the source, it is possible the law will be passed by presidential decree before parliamentary elections take place.

As well as creating the new independent gas regulator, the gas law will also create an independent transmission company and strengthen entities responsible for energy efficiency.