ACCC introduces changes to gas marketing competition policy

The Australian Competition and Consumer Commission (ACCC) has allowed four major LNG and two onshore gas companies greater trading and pricing freedom in Western Australia and the Northern Territory to provide more gas for the country’s east coast.

The Australian Competition and Consumer Commission (ACCC) has allowed four major LNG and two onshore gas companies greater trading and pricing freedom in Western Australia and the Northern Territory to provide more gas for the country’s east coast.

Chevron, Inpex, Shell and Woodside Petroleum will be allowed to coordinate their maintenance activities in Western Australia together without the risk of breach of competition laws. Previously there were concerns that companies not undertaking maintenance would have an unfair advantage in gas trading as they would have market-sensitive knowledge about scheduled downtimes of their maintenance-keeping rivals.

ACCC chairman Rod Sims said that enabling the LNG companies to schedule maintenance together would improve efficiency and maximise LNG production. He added that the ACCC will compel the producers to publicly disclose their maintenance information.

Sims said the approvals have been given for five years, not the 10 years sought by the producers, because due to the changing nature of gas markets there is significant uncertainty about the impact of the proposed conduct on related markets.

The ACCC has also approved Central Petroleum Limited and the Macquarie Group’s Mereenie field LNG supply negotiation agreement for the next three years to help ramp up their joint venture Mereenie gas project.

‘In order to allow the development of Mereenie gas as soon as possible, the ACCC has granted interim authorisation, which enables the parties to begin negotiating joint supply agreements with customers,’ Sims said.

He added that the ACCC’s view is that joint marketing is likely to encourage investment to increase gas production at Mereenie and bring forward affordable new gas supply benefits for the public. The Commission has born in mind that the supply of gas for east coast Australia customers is tight which is putting significant pressure on consumers and businesses.

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