The Australian Energy Market Commission (AEMC) has published a Terms of Reference for a review into whether gas pipeline capacity trading reforms, developed for the east coast gas market, should apply in the Northern Territory.

East coast gas markets are currently being redesigned to support faster and more efficient gas trading and access to pipeline transportation along the east coast of Australia.

The changes are based on a package of reforms developed by the AEMC in 2016 and endorsed by the COAG Energy Council.

Construction is also underway on a new pipeline to link Tennant Creek in the Northern Territory with Mount Isa in Queensland, with the first gas scheduled to flow in late 2018.

The COAG Energy Council has tasked the AEMC with considering whether the pipeline capacity trading reform package should also be implemented, in whole or in part, in the Northern Territory as the new pipeline will connect the state to the east coast gas market for the first time.

The pipeline capacity trading reform package consists of:

  • A day-ahead auction of contracted but un-nominated pipeline capacity
  • A capacity trading platform to support exchange-based trading
  • Standardised provisions in capacity agreements to provide greater flexibility and tradability
  • A reporting framework for secondary trades of pipeline capacity and hub services

The Commission’s report is due to be published in March 2018.

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