Natural gas is a major fuel source in Australia, the third highest after oil and coal. Gas plays an important role in generating energy for businesses and households. It has an equally important role in generating electricity where it is valued for its ability to:

• respond quickly to changes in demand
• be easily stored in tanks, reservoirs or pipelines (where it can be drawn upon quickly).

The gas system in Australia

The gas supply chain in Australia is comprised of:

• conventional and non-conventional gas reserves which can be found both on and off shore
• producers who extract and produce the gas for consumption
• gas transmission and distribution pipelines which transport and store the gas
• electricity generators, large and small businesses, and households who use the gas.

Gas Scheme Register

The Gas Pipeline Register is a register of all pipelines that are, or have been, subject to any form of regulation or exemption from regulation under the National Gas Law (NGL) or the National Third Party Access Code for Natural Gas Pipelines (the previous scheme). Information on decisions made regarding these pipelines is included in the register.

The gas market

The gas market in Australia is made up of three distinct regions, the:

• Eastern gas region
• Western gas region
• Northern gas region

Most wholesale gas is sold under bilateral contracts, although the eastern gas market has developed some wholesale gas markets.

There are 3 types of wholesale gas markets:

• gas supply hubs
• short term trading market hubs
• the declared wholesale trading market in Victoria.

These markets are operated by the Australian Energy Market Operator (AEMO)

Pipeline capacity is managed under two different approaches:

• Contract carriage
• Market carriage

Businesses and households buy gas via gas retail markets .

Regulation of gas

Gas pipelines are regulated under the:

• National Gas Law (NGL)
• National Gas Rules (NGR)

The Australian Energy Regulator (AER) regulates pipeline services in all jurisdictions except Western Australia where the Economic Regulation Authority holds this responsibility.

The role of the AEMC

Under the National Gas Law, the AEMC makes and amend the National Gas Rules. These include rules that:

• govern the wholesale gas balancing markets in the eastern gas market
• provide the basis for third party access to transmission and distribution pipelines
• facilitate the provision of services to retail customers .

The AEMC also conducts independent reviews and provides advice to governments on the development of natural gas markets.

In both of these functions, we are required by law to have regard to the National Gas Objective which promotes the efficient investment in, and efficient operation and use of, natural gas services for the long-term interests of consumers of natural gas with respect to price, quality, safety, reliability and security of supply of natural gas.