Federal gov finalises Gas Code

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The federal government has finalised the Mandatory Gas Code of Conduct, which will give producers the certainty needed to invest in supply.

Producers have offered indicative domestic supply commitments of at least 260 petajoules (PJ) to 2027, which will reduce the risk of shortfalls.

The Code introduces a price cap, which is set to be at $12 per gigajoule (GJ) and subject to a review commencing in July 2025.

It also introduces a process to qualify for exemptions from the price cap, on the basis of making satisfactory Australian Competition and Consumer Commission (ACCC) supply commitments.

The Code will also allow small producers of gas to be exempt from the price cap if they supply the domestic market only.

The final Code follows extensive consultation with gas producers and users, which had the Australian Pipelines and Gas Association (APGA) share its concerns.

At the time, APGA chief executive Steve Davies said the domestic gas infrastructure industry is strongly supportive of action to bring affordable gas supply to Australian households and industry.

“Gas-fired generation will be vitally important to ensure the ongoing security of the National Electricity Market as coal-fired generation exits and more intermittent renewables come online,” he said.

“While more detail is required, the prioritisation of the domestic gas market is welcome.

“There remain some concerns whether reliable gas supply will be available to meet demand in the medium term.

“The federal government should make the most of this opportunity by allocating resources toward developing carbon-neutral renewable gas supply, such as hydrogen and biomethane, which will increase competition and supply while reducing emissions for end-users.”

To access the final code, visit here.

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