Market Review: Open

Overview

This biennial review will track the growth in liquidity in wholesale gas and pipeline trading markets. It will enable the AEMC to track progress and the effectiveness of its gas reform package to support faster and more efficient gas trading and access to pipeline transportation along the east coast of Australia. As implementation of the complete reform package will take several years, our first review of gas market liquidity focuses on providing a baseline for future reviews.
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This biennial review will track the growth in liquidity in wholesale gas and pipeline trading markets. It will enable the AEMC to track progress and the effectiveness of its gas reform package to support faster and more efficient gas trading and access to pipeline transportation along the east coast of Australia. As implementation of the complete reform package will take several years, our first review of gas market liquidity focuses on providing a baseline for future reviews.

Draft report

On 26 April 2018 the AEMC published a draft report that contains the baseline measures of liquidity in wholesale gas and pipeline trading markets, and the Commission’s initial findings, for stakeholder feedback.. These measures were calculated based on the metrics and methodologies previously proposed in the scoping paper that was published by the AEMC on 13 February 2018.

This first review focused mainly on liquidity in the gas supply hubs and the short-term trading market and Victorian Declared Wholesale Gas Market where information was publicly available. These measures were calculated based on the metrics and methodologies previously proposed in the scoping paper that was published by the AEMC on 13 February 2018.

We found that liquidity on the Wallumbilla gas supply hub has increased over the past two years. This positive change was reflected in almost all metrics of liquidity that formed part of the analysis.

Results for the other markets were more diverse and it is too early to assess the trends for gas market liquidity from these initial metrics

Submissions on the draft report are due by 24 May 2018.

Background 

On 20 December 2017 the Council of Australian Governments Energy Council (the COAG Energy Council) provided the AEMC with terms of reference to conduct a biennial review into the growth in liquidity in the wholesale gas and pipeline capacity trading markets. 

Broadly, the terms of reference requires the AEMC to:

  • monitor changes in liquidity in wholesale gas and pipeline capacity markets
  • report on the effectiveness of reforms
  • identify the need for any further reforms, if appropriate.
     
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Documentation

INITIATION

AEMC Documents

COAG Energy Council documents

Submissions

Late submissions