The Australian Energy Market Commission (AEMC) has recommended the Northern Territory implement a package of gas pipeline capacity trading reforms to make it cheaper and easier to move gas around the market.
In a final report published today the Commission found that extending the AEMC’s east coast gas market reforms to the Northern Territory would have benefits for both the Northern Territory and the soon-to-be-connected east coast market.
The reforms, to be considered by the COAG Energy Council, are designed to:
- create incentives for primary shippers to trade secondary capacity
- lower search and transactions costs for the execution of secondary trades
- make capacity products more tradeable across an interconnected market by virtue of standardisation
- through the introduction of the reporting framework, increase participants’ confidence in the market and ease of doing business.
The reform package includes:
- a day-ahead auction of contracted but un-nominated pipeline capacity
- a capacity trading platform to support exchange-based trading
- standardised provisions in capacity agreements to provide greater tradability
- a reporting framework for secondary trades of pipeline capacity and hub services.
Media: Prudence Anderson, Communications Director, 0404 821 935 or (02) 8296 7817.
Background
East coast gas markets are currently being redesigned to support faster and more efficient gas trading and access to pipeline transportation along the east coast of Australia. The changes are based on a package of reforms developed by the AEMC in 2016 and endorsed by the COAG Energy Council.
Meanwhile, construction is underway on a new pipeline to link Tennant Creek in the Northern Territory with Mount Isa in Queensland, with the first gas scheduled to flow in late 2018.
As this new pipeline will connect the Territory to the east coast gas market for the first time, the COAG Energy Council tasked the AEMC with considering whether the pipeline capacity trading reform package should also be implemented, in whole or in part, in the Northern Territory.