Australia seeks feedback on gas transparency changes

The Australian government has issued a consultation paper on the proposed rule changes to the gas market in eastern Australia and the Northern Territory that were agreed to in April, in an effort to introduce regulatory changes to improve transparency.

The reform measures seek to enhance transparency in the eastern and northern Australian gas markets, address information gaps relating to gas and infrastructure prices, supply and availability of gas, demand, and infrastructure used to supply gas to consumers, said the Council of Australian Governments (COAG) energy council.

To implement the measures, changes will be required to the national gas law and associated regulations and rules, the council said.

The measures include a requirement for upstream producers to provide production cost estimates in the gas statement of opportunities (GSOO) that should be published annually, and for gas producers under short term gas supply agreements of 12 months or less to report the prices and key terms of the agreement and allow the Australian Energy Regulator (AER) to have a new price reporting function. The new function will allow the AER to publish an LNG netback price series. Other measures include providing information on the prices paid for gas under short and longer term gas supply agreements, information on LNG export prices and a LNG import parity price series or information on import prices, the council said.

Other reporting requirements include gas producers publishing proven and probable reserves by field as well as changes in these reserves over 12 months including acquisitions, disposals and field upgrades or downgrades, the COAG council said.

Producers will also be required to report the volume of gas they intend to produce and the volume of production already contracted for each year of the GSOO forecast. LNG exporters will be required to report their LNG facility's short and medium term demand-supply balance in GSOO.

The COAG energy council is seeking feedback by 17 December. Legislative changes to put all these transparency changes into law will be done through the South Australia state parliament in the National Gas (market transparency) Variation Regulations 2020. Changes will apply nationally.

By Kevin Morrison