The Australian Energy Market Commission (AEMC) has published its draft determination and draft rule to extend the Declared Wholesale Gas Market (DWGM) Dandenong liquefied natural gas (LNG) interim arrangements.

The draft rule would enable AEMO to address security and reliability risks in the short-term until an enduring fit-for-purpose solution is implemented.  

We have made a more preferable draft rule  

Our more preferable draft rule provides for:  

• A four year extension of AEMO’s interim buyer and supplier of last resort powers for the Dandenong LNG storage facility
• A rules-based arbitration mechanism to be called upon if a dispute arises about the extension of the LNG storage agreement between AEMO and the Dandenong storage facility operator, APA
• Additional measures to limit the costs that AEMO may otherwise incur under the interim arrangements.
• The application of a targeted set of Gas Bulletin Board reporting obligations to the Dandenong liquefaction facility.
• AEMO to have greater operational visibility of the Dandenong liquefaction facility.

The existing interim arrangements expire at the end of 2025, at a time when the ACCC and AEMO are projecting continued and growing shortfall risks for the southern states and Victoria, particularly over the winter months.  Against this background, the Commission considers a four year extension is the most efficient solution to enable AEMO to address projected risks to security and reliability in the DWGM. The four year extension under the draft rule would:

• build on the interim framework established by the AEMC's 2022 DWGM interim storage measures final rule
• recognise that the interim arrangements were not designed as a long-term or enduring solution, but instead as a stop-gap measure until more permanent and fit-for-purpose arrangements can be implemented. The Commission will consider this issue further when we initiate the East Coast Gas System Supplier of Last Resort rule change process.

We are interested in your views on the issues raised in the draft determination. Stakeholder submissions are due by 18 September 2025.

Background

On 3 April 2025, the Australian Energy Market Commission (AEMC) received a rule change request from the Hon. Lily D'Ambrosio, Minister for Energy and Resources, Climate Action, and State Electricity Commission, to amend the National ​Gas​ Rules. The rule change request proposes a short-term three year extension of the 2022 DWGM Dandenong LNG (DLNG) interim arrangements and a range of measures to improve transparency and oversight of the Dandenong liquefaction facility.  

On 1 May 2025, the AEMC initiated consultation on the rule change request.  We received 8 submissions, which can be found below.  

Context

On 15 December 2022, the AEMC made a final rule to enable the Victorian gas market operator to better manage the risk of curtailment for gas users during the tight demand-supply conditions expected from 2023 to 2025 (National Gas Amendment (DWGM interim LNG storage measures) Rule 2022 No. 4).  

The Commission’s 2022 final rule:  

• empowered the Australian Energy Market Operator (AEMO) to act as buyer and supplier of last resort in relation to the DLNG storage facility for an interim period commencing on 1 January 2023 and ending on 31 December 2025
• set out how AEMO is to perform both the buyer and supplier of last resort functions  
• set out the supporting arrangements, including the contractual, cost recovery and proceeds distribution, and accountability and transparency arrangements that apply to these functions.  

Next steps

We seek feedback on our draft determination and draft rule by 18 September 2025.