The AEMC is calling for submissions on a gas Pipeline Regulation and Capacity Trading discussion paper. The paper is part of the East Coast Wholesale Gas Market and Pipeline Frameworks Review.

The review’s workstream on pipeline capacity usage and investment is focussed on measures to facilitate the efficient transportation of gas, and how access to transmission pipelines is bought and sold. This work includes investigation of access to capacity sold by pipelines, and secondary trading of contracted but unutilised pipeline capacity so gas supply can most effectively meet demand.

This discussion paper aims to stimulate discussion around the arrangements for pipeline regulation and capacity trading in the context of the Council of Australian Governments’ Energy Council Vision for the establishment of a liquid wholesale gas market.

The ability of gas to flow easily across the pipeline system to where it most highly valued is a critical enabler of a liquid gas market. If there are obstacles to participants being able to access pipeline capacity, this will inhibit their ability to trade gas. Consequently, efficiency in the use of pipeline capacity will be of fundamental importance in allowing the vision to be achieved.

The discussion paper assesses the effectiveness of the current regulatory arrangements for pipeline capacity trading, and identifies three broad approaches to improve the allocation of pipeline capacity.

This discussion paper follows the release of the AEMC’s Stage 1 Final Report for the East Coast Wholesale Gas Markets and Pipeline Frameworks Review, which was published on 23 July 2015, and accompanies other discussion papers as part of Stage 2 of the review.

Submissions to the discussion paper close on 16 October 2015 and the AEMC will be considering feedback received through the consultation process as we prepare the Stage 2 Draft Report.

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