The Australian Competition and Consumer Commission has approved, on the information available to it, an agreement for the haulage of gas from Moomba in the Cooper Basin gasfields to Stage 1 of a proposed gas-fired cogeneration plant at Botany, NSW.
The agreement is between East Australian Pipeline Limited (EAPL) and AGL Wholesale Gas Limited (AGLWG). EAPL is the operator of the Moomba-Sydney Pipeline. The agreement provides for a through rate of haulage over two pipeline systems (EAPL and AGL Gas Networks in Sydney).
'The ACCC was hampered in its decision as it did not have access from third parties to all pertinent information about the arrangements for supply and haulage of gas to ALISE Energy Australia Pty Ltd's cogeneration project', Deputy ACCC Chairman, Mr Allan Asher, said today. 'It is particularly disappointed that the gas purchaser, ALISE Energy Marketing Pty Ltd, and the gas supplier, AGL Energy Sales and Marketing Limited, declined to provide significant information in relation to the gas supply arrangements.
'The decision should not be taken as an approval for the supply of gas to the ALISE Project, nor does the decision approve the terms and conditions on which ALISE purchases gas either now or in the future. 'The ACCC will be unconstrained by this decision to approve the gas haulage agreement should it initiate inquiries pursuant to the Trade Practices Act 1974 into any relevant gas supply arrangements.'
The Commission understands that ALISE proposes to develop the Project in two stages. The Commission stated that it was satisfied that a process of competition occurred for the initial supply to the ALISE Project, however at that stage the project was for 24PJ of gas yearly, and it had since been scaled down to two stages, the first for approximately 12PJ of gas each year.
The Commission believes that should the second stage proceed, arrangements for gas supply and haulage for that stage may require a competitive selection process. It may be that any public benefit arguments for not following that course could be considered in the context of an application for authorisation under the Trade Practices Act. Mr Asher said that in conjunction with the decision, the ACCC had released guiding comments for the industry when lodging or responding to applications to the ACCC for approval of related-party agreements under the Moomba-Sydney Pipeline System Sale Act 1994 or Associate Contracts under the proposed National Access Code.
Such contracts or agreements involve a regulatory approval process because, broadly speaking, they are made between a pipeline operator and a related company having gas marketing interests. 'The ACCC's preference is for a 'light-handed' regulatory approach, but this will only be possible if there is a willingness amongst all relevant interests to participate in a transparent process of assessment', he said.
Copies of the Decision will be available from all ACCC offices in each capital city, Townsville and Tamworth. It will also be available on the ACCC's Internet site, http://www.accc.gov.au.