Rule Change: Open

Overview

On 23 May 2019 the Australian Energy Market Commission made a draft rule providing an exemption for the Northern Territory LNG facilities, Darwin LNG and Icththys LNG, from Bulletin Board information reporting requirements in relation to the facilities that are upstream of the connection point of these projects with the domestic market.
View more

On 23 May 2019 the Australian Energy Market Commission made a draft rule providing an exemption for the Northern Territory LNG facilities, Darwin LNG and Icththys LNG, from Bulletin Board information reporting requirements in relation to the facilities that are upstream of the connection point of these projects with the domestic market. Gas flows into the domestic market will still be reported at the connecting points with the Wickham Point pipeline. 

The rule change request received from the Northern Territory Government in November 2018 proposed to exempt certain LNG facilities from providing information to the Natural Gas Bulletin Board. 

The Territory Government claimed the NT LNG projects operate differently to their east coast counterparts, engaging in only very limited trade with the domestic market, as all gas for LNG is sourced from offshore fields and most of the gas produced is dedicated to LNG production. However, in the event that emergency or back-up gas supply is required, gas can be made available to the NT’s Power and Water Corporation via a smaller pipeline connecting to the domestic market. 

The Territory Government maintained  there would be negligible benefit from the publication of information related to Territory LNG producers’ upstream facilities. However, the cost in terms of the administrative burden of reporting and the commercial disadvantage to the LNG projects from revealing operational data, would be considerable.

The Territory Government argued that as a result of new Gas Bulletin Board reporting obligations under Part 18 of the NGR, the NT LNG facilities might choose to stop providing emergency back-up gas supply to the domestic market. 

The Territory Government considered the rule change necessary to preserve the commercial incentives for Territory LNG producers to maintain their connections to the NT gas market and to continue with their emergency back-up gas supply arrangements.

Alternative sources of emergency back-up supply, it was argued, are likely to be more expensive and offer less security of supply than the existing arrangements.

Draft Determination

On 23 May 2019 the AEMC made a draft rule that will assist the NT government in maintaining a secure source of back-up gas supply by addressing its concerns that the NT LNG projects may not continue to provide that back-up supply if they are required to report on the Bulletin Board as a result of the back-up connection with the NT domestic gas market. 

The draft rule provides both NT LNG facilities with an exemption from reporting requirements on the Bulletin Board for their facilities that are upstream of the connection point with the domestic market. All flows into the domestic market will still be reported on the connecting Wickham Point pipeline. 

The exemption is provided under circumstances in which gas flow occurs for the purposes of emergency back-up supply only. 

The buyer of emergency back-up supply, Power and Water Corporation, is required under the draft rule to provide the Australian Energy Regulator with written notice of the reasons for emergency supply following each day (or consecutive days) of emergency supply. 

Under the draft rule the AER may remove the exemption (and require the NT LNG facilities upstream of the domestic market to report on the Bulletin Board) if gas flows from those facilities to the NT domestic market  other than on a gas day when there is a planned or unplanned outage to the Blacktip gas field and its associated supply infrastructure, including the Bonaparte gas pipeline.

Submissions in response to the draft determination are due by 4 July 2019.

Background

In October 2018 a new rule started to enhance the breadth and accuracy of information provided to the market and the public through the Natural Gas Bulletin Board. The Bulletin Board, managed by the Australian Energy Market Operator, provides up-to-date gas system and market information to help participants make more informed decisions about trading, investing in, or using gas.

The new rule increases the amount and frequency of data reported on the Bulletin Board, along with greater data accuracy requirements and a stronger compliance framework.

The rule obliges certain facilities to be registered on the Bulletin Board based on a minimum 10 TJ per day threshold. With the completion of the Northern Gas Pipeline connecting the Territory to the wider east coast market in January 2019, NT facilities were required to be registered on the Bulletin Board by 6 May 2019.
 

View less

Documentation