The AEMC has made a final rule that enables Jemena Gas Networks (NSW) Ltd (Jemena), as the operator of the NSW Gas Network, to continue to utilise either the matched allocation process or the Short Term Trading Market (STTM) for the purpose of meeting its network’s daily gas needs for operational requirements.  

Under the matched allocation process, gas purchased by Jemena to meet the operational requirements of its distribution network can be excluded from the operation of the STTM.

The matched allocation process was a transitional provision in the National Gas Rules (NGR) that was set to expire on 30 June 2015. The effect of the Commission’s final rule is to make the transitional provisions a permanent arrangement from 28 May 2015 by moving them from Schedule 1, to Part 20, of the NGR.

The Commission is satisfied that the final rule will, or is likely to, contribute to the National Gas Objective as it will assist Jemena to better manage its obligations under its Access Arrangement and the gas Retail Market Procedures to replace unaccounted for gas* in its distribution network, given the role of the distributor and particular treatment of unaccounted for gas in the NSW gas retail market. Thus promoting the efficient operation and use of natural gas services for the long term interest of consumers.

The final rule is consistent with Jemena’s proposed rule, with some minor amendments to improve the clarity of the proposed rule and to reflect stakeholder feedback on the draft rule determination.

Background

On 15 September 2014, Jemena submitted a rule change request in relation to the matched allocation process set out in the NGR.

The matched allocation process allows Jemena to enter into matched allocation agreements with one or more STTM shippers (e.g. gas wholesalers) and one or more STTM pipeline operators (e.g. gas transmission pipeline operators) for the provision of a quantity of gas. The quantity of gas provided under this arrangement, the matched allocation quantity, is excluded from settlement in the STTM.

Jemena proposed that the matched allocation process, which was a transitional measure at the time of the rule change proposal, become a permanent provision in the NGR. 

* The transitional provision in the NGR refers to the gas procured by Jemena as being “natural gas purchased by Jemena to meet the operational requirements of its STTM distribution system” (see clause 26(1)(a) of the NGR). In effect, the gas procured by Jemena under this provision largely refers to “unaccounted for gas”, which is a term used in Jemena’s Access Arrangement.