Gas Market Development Plan – Summary as at July 2015
Policy Stream
The National Gas Objective is to promote 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. Ministers have agreed to an Australian Gas Market Vision statement, which outlines four key areas of focus for the next phase of gas market reform and development. The COAG Energy Council will initiate actions to improve:
Competitive Supply, Transparency and Price Discovery, Risk Management, and Removing Unnecessary Regulatory Barriers.
Encouraging Competitive Supply


Current Reforms
Underway



Forward Actions

Improvements are made to the regulatory and investment
environment so that gas supply is able to respond flexibly to
changes in market conditions.
A ‘social licence’ for onshore natural gas development
achieved through inclusion, consultation, improving the
availability and accessibility of factual information relating to
resources projects, and rigorous science to ensure that the
concerns of communities will be addressed.
The COAG Energy Council welcomes Geoscience Australia’s
progress with the provision of information on unconventional
hydrocarbons and notes that continued work in this area will
assist industry to identify development opportunities.




In response to domestic gas supply concerns, the UPR has
provided the COAG Energy Council its second annual report
on unconventional gas reserves/resources and production,
including new well drilling rates and production forecasts.
COAG Energy Council officials are pursuing the development
of a gas supply strategy, including ways to facilitate the
responsible development of gas resources, which enables
supply to respond flexibly to market conditions.
Investigate opportunities to improve information availability
and accessibility to local communities, informed by robust
science.
A competitive retail market that will provide customers
with greater choice and large users with enhanced
options for self-supply and shipment.
The provision of accurate and transparent market
making information on pipeline and large storage
facilities operations and capacity, upstream resources,
and the actions of producers, export facilities, large
consumers and traders.
AEMO launched the redeveloped NGBB website on
11 December 2014. Improving the presentation and
usability of existing information, the redeveloped NGBB
also publishes voluntary standard contractual terms
and conditions, and eastern gas market capacity listing
information made via the Gas Supply Hub trading
exchange.

Liquid and competitive wholesale spot and forward markets
for gas in Australian gas markets which provide tools for
participants to price and hedge risk.

Access to regional demand markets through more
harmonised pipeline capacity contracting arrangements which
are flexible, comparable, transparent on price, and nondiscriminatory in terms of shippers’ rights, in order to
accommodate evolving market structures.

Harmonised market interfaces across Australian gas markets
that enable participants to readily trade between locations and
find opportunities for arbitrage and trade.

Identified development pathways to improve interconnectivity
between supply and demand centres, and existing facilitated
gas markets, which enable the enhanced trading of gas.

The COAG Energy Council has tasked the AEMC to
undertake the East Coast Wholesale Gas Market and Pipeline
Frameworks Review, to assess the number, location and
function of facilitated gas markets and gas transportation
arrangements in eastern Australia. Officials are progressing
short term reform actions from Stage One of the Review and
the Council will consider Stage Two recommendations on the
long term market development path in December 2015.
On 31 March 2015 COAG Energy Council officials
submitted a rule change request to the AEMC to
mandate the provision of enhanced pipeline capacity
trading information for publishing on the NGBB.

AEMO is identifying opportunities for incremental
improvements to the Gas Statement of Opportunities,
particularly with respect to CSG to LNG.

Work with AEMO and the Commonwealth Department
of Industry and Science’s Office of the Chief Economist
(formerly BREE) to improve availability of market
information and analysis.
AEMO has been tasked to implement a Moomba Gas Supply
Hub by April 2016. A Moomba trading location will improve
market signals through greater price transparency and
competition at a key gas supply and transit location.

The COAG Energy Council has tasked AEMO to review the
operation of the Wallumbilla Gas Supply Hub in 2015, and
consider further developments for the Hub. AEMO is
reviewing hub services and considering requirements for the
establishment of a single trading product. AEMO will present
a final report to the COAG Energy Council in December 2015.

Facilitate major gas supply and infrastructure projects which
are material to a supply side response to gas prices.

Pursue market based initiatives and, while noting different
existing jurisdictional approaches, not pursue national
reservation policies or national interest tests.


UPR will provide advice on medium-term strategic issues
relevant to the acreage release process.


The Council notes the importance of further consideration of
competition issues and barriers to entry which may be
inhibiting opportunities to make supply more competitive.
The Council will aim to facilitate supply responses, by
removing unnecessary regulatory impediments, streamlining
regulation across governments and improving the availability
of information.
Increased flexibility and opportunity for trade in pipeline
capacity.



Risk Management
Transparency and Price Discovery
Continue reform efforts to improve demand forecasting
and stakeholder participation that inform the Gas
Statement of Opportunities.
Following consideration by the AEMC of the COAG
Energy Council gas transmission pipeline capacity
trading information rule change request, officials will
work with AEMO to implement the rule change.

Continue to work with AEMO and the AEMC to
enhance gas market information published on the
NGBB.

Two years following implementation of the Gas
Transmission Pipeline Capacity RIS, the COAG Energy
Council will review the usefulness and effectiveness of
the measures and consider whether further action is
required to improve secondary pipeline capacity
trading.

AEMO is reviewing the operation of the STTM on an ongoing
basis. A number of rule change proposals have been
completed to adjust components of the STTM to reflect the
changing environment.

Facilitated gas markets are an important risk management
tool for gas market participants. The COAG Energy Council,
through the AEMC review, will assess whether changes are
required to existing facilitated markets, or whether new
markets are required.

The Wallumbilla and Moomba Gas Supply Hubs will improve
price transparency and could potentially support the
development of a gas futures market, which will enable
participants to manage and price risk.
Removing Unnecessary Regulatory
Barriers

Regulation of gas supply and
infrastructure is appropriate and enables
participants to pursue investment
opportunities, in response to market
signals, in an efficient and timely
manner.

The Australian Government is
committed to delivering a One-Stop
Shop for environmental approvals that
will accredit state planning systems
under national environmental law. The
One-Stop Shop policy aims to simplify
the approvals process for businesses,
lead to swifter decisions and improve
Australia's investment climate, while
maintaining high environmental
standards.

In December 2013, SCER noted
jurisdictions’ reports on their work to
implement each of the Harmonised
Regulatory Framework for Natural Gas
from Coal Seams 18 leading practice
recommendations. The Framework
provides guidance to regulators in the
management of CSG and aims to
ensure regulatory regimes are robust,
consistent and transparent across all
Australian jurisdictions.

Continue to report and implement
continuous improvement of the National
Harmonised Regulatory Framework on
Natural Gas from Coal Seams.

Continue to pursue efforts to streamline
environmental approvals processes that
accredit states to make approval
decisions under national environmental
law.
Abbreviations: AEMC - Australian Energy Market Commission; AEMO – Australian Energy Market Operator; BREE - Bureau of Resource and Energy Economics; CSG - Coal Seam Gas; SCER - Standing Council on Energy and Resources (now
COAG Energy Council);
LNG – Liquefied Natural Gas; STTM – Short Term Trading Markets; UPR - Upstream Petroleum Resources Working Group; RIS - Regulation Impact Statement; NGBB - National Gas Bulletin Board.