Aussie Gov's Gas Market Review Submissions Online

We are conducting the Gas Market Review jointly with the Department of Climate Change, Energy, the Environment and Water (DCCEEW).

We consulted on a paper to seek stakeholder views on current regulations and potential reform options. We met with over 80 stakeholders, ran a public webinar, and received over 100 submissions.

The review is examining the:

• Australian Domestic Gas Security Mechanism (ADGSM)
• Gas Market Code (the Code)
• Heads of Agreement (HoA) with east coast liquified natural gas (LNG) exporters.

Here is a summary of stakeholder feedback on key policy themes:

• Supply, security and trade. Most stakeholders support a domestic reservation policy, supported by incentives for supply and infrastructure investment. Most stakeholders did not support strengthening the ADGSM or the Code or extending the HoA.
• Contracting and bargaining conduct. Most stakeholders supported amendments to the Code's EOI (expression of interest) process to better address bargaining power imbalances. They expressed concerns with its rigidity. Many supported major reforms to streamline contracting and bargaining processes.
• Gas market transparency, reporting and governance. Stakeholders expressed strong interest in centralised and more real-time transparency for price and supply information via AEMO if anonymised. Price and shortfall reporting, if managed through AEMO's reporting structures, could provide more real-time information than existing processes.
• Wholesale gas prices. Many stakeholders noted the Code's reasonable price mechanism has not effectively reduced prices or enhanced competition. Some supported its removal. There was broad agreement on the need to increase supply to help lower prices, but opinions were divided on whether an import terminal would achieve that goal.
• Efficient wholesale markets. Stakeholder views on options of market making and trading hub reform were mixed. Stakeholders noted that bilateral contracting is a relevant primary method to source gas, with markets currently used to balance portfolios. A number of stakeholders supported opportunities to improve the efficiency of facilitated markets and reform of AEMO prudential requirements.

We expect to provide a final report to government by the end of the year. We will consult on any significant changes resulting from the review before they are finalised.

Thanks to everyone who has given input so far.