ACCC to deliver review of gas markets, AEMO calls for increased pipeline capacity

“The gas market has an effective access regime for gas transportation, with the National Gas Law invoking the prospect of regulation to market participants, thus helping to ensure competition remains strong and improving commercial outcomes,” said the Australian Pipelines and Gas Association (APGA) Chief Executive Cheryl Cartwright.

“The pipeline industry has demonstrated innovation in response to a competitive environment, with investment in infrastructure and services.”

Since 2010, more than $850 million has been spent expanding existing infrastructure, helping to establish an efficient pipeline network across eastern Australia’s gas markets and promoting basin-on-basin competition.

“If there is a gas shortage in the market or there are higher prices, then the market should respond,” said Ms Cartwright.

“It’s economics 101.”

While the APGA is very enthusiastic about the expanding gas export market, particularly in Queensland with the development of three major LNG export facilities at Gladstone, the Association is concerned about the gas supply to the domestic market.

“We are pleased the Australian Competition and Consumer Commission (ACCC) has been asked to look at competitiveness in the market and we hope that this is a first step to overcoming any barriers to development of Australia’s vast gas reserves,” said Ms Cartwright.

“We have sufficient gas to meet the export and domestic demand. Perhaps we need to refresh the approach of gas development, such as encouraging smaller explorers to develop their reserves for the domestic market or providing access to major processors’ facilities.

“The ACCC investigation is likely to generate some interesting discussion.”

Increased pipeline capacity will reduce gas supply gaps: AEMO report

The Australian Energy Market Operator’s (AEMO) 2015 Gas Statement of Opportunities (GSOO), released last week, forecasts no supply gaps for any of Australia’s eastern and south-eastern gas markets over the short-term to 2019.

The report states that lower than forecast consumption levels, most notably in the industrial sector within Queensland and New South Wales, combined with upgrades to gas market infrastructure, have alleviated short-term supply gaps that were initially forecast by AEMO in its previous GSOO update in mid-2014.

AEMO Managing Director and Chief Executive Officer Matt Zema said the shift in supply forecasts illustrates the dynamic, ever-changing natural gas landscape, most notably following the initiation of LNG exports.

“Australia’s eastern and south-eastern gas markets are experiencing rapid transformational change. The 2015 GSOO points to a 17 per cent forecast decline in New South Wales’ gas consumption in 2019 and identifies crucial upgrades to gas market infrastructure, such as the commissioning of the Newcastle LNG storage facility,” said Mr Zema.

“A fall in the forecast demand, increased capacity of the Victoria-New South Wales interconnector, and upgrades to the Moomba-Sydney and Moomba-Adelaide pipelines, all reduce the potential for supply gaps in the short term.”

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