The AEMC today published the results of our new biennial review tracking the growth in liquidity in wholesale gas and pipeline trading markets.
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 and endorsed by the COAG Energy Council.
As implementation of the complete reform package will take several years, this first review of gas market liquidity provides a baseline for future reviews.
The final report found that liquidity at the gas supply hub at Wallumbilla has increased over the past two years. This positive change was reflected in almost all metrics of liquidity that formed part of the analysis.
Where information was available, metrics were also calculated for other facilitated gas markets including the gas supply hub at Moomba, the short-term trading markets, the Victorian Declared Wholesale Gas Market and pipeline capacity markets. Results for these other markets were more diverse across all metrics.
From today, the Australian Energy Regulator (AER) will publish these quantitative liquidity indicators on its Industry statistics webpage on a regular basis to promote market transparency.
The final report notes that with only two years of data, it is too early to assess the trends for gas market liquidity from these initial metrics. Also, because the Moomba location of the gas supply hub has only been in operation since June 2016, more time should be given for any of the related liquidity metrics to develop.
However, these baseline measures will enable the AEMC to track progress and assess the effectiveness of reforms and the case for further reform to wholesale gas and pipeline trading markets over the longer term. Future biennial reviews will:
- continue to monitor changes in liquidity in the wholesale gas and pipeline capacity trading markets
- report on the effectiveness of reforms in the east coast and Victorian gas markets
- identify the need for any further reforms, if appropriate.
Media: Communication Manager, Prudence Anderson 0404 821 935 or (02) 8296 7817