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ACCC: gas supply tight but no 2020 shortfall

The Australian Competition and Consumer Commission’s (ACCC) seventh Gas Inquiry Report said a gas supply shortfall on the east coast market was unlikely to occur next year, with producers expecting to provide about an extra 113 PJ of gas than provided in 2019.

ACCC Chair Rod Sims said prices in the southern states had not decreased, with customers paying around $10–12/GJ in the first quarter of 2019.

“The supply-demand balance in the southern states remains tight, and there is uncertainty about how much gas will actually be used for gas power generation and how much of the gas produced in the south, particularly the Cooper Basin, will flow to Queensland,” said Mr Sims.

“It is clear that these current gas prices remain high and challenging for many commercial and industry gas users, and while some have found ways to absorb the higher costs, this is often not possible.

“This underscores the need for timely action, both by governments, by gas producers and by retailers.”

The ACCC said that the reforms to gas pipelines contained in Part 23 of the National Gas Rules, introduced two years ago, were working as intended, although Mr Sims said the ACCC were “disappointed pipeline operators do not appear to be taking their reporting obligations seriously”.

The Australian Pipelines and Gas Association (APGA) welcomed the report, with APGA CEO Steve Davies saying the findings regarding Part 23 aligned with the feedback the association had been receiving from gas users.

“We are working with the market to deliver new investment to facilitate new supply and to deliver lower prices and increased flexibility on major pipelines to support customers,” he said.

“The changes to Part 23 of the National Gas Rules introduced a new regulatory framework imposing major new information disclosure obligations and a binding arbitration scheme over previously unregulated pipelines.

“It is still relatively early days for Part 23 and it is excellent to see improved outcomes being achieved already. The pipeline industry takes its regulatory obligations seriously and we will work with the government to refine the regime through the processes already under way.”

The ACCC will deliver its next gas report in December 2019.

For more information visit the ACCC website.

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