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ACCC to approve Queensland

LNG maintenance co-ordination

POLICY AUSTRALIA’S competition watchdog has said
it is inclined to approve plans by Queensland’s
three LNG projects to extend their co-ordination
of maintenance schedules long as the process
remains transparent.
The Australian Competition and Consumer
Commission (ACCC) announced on May 5
that it was open to approving Australia Pacific
LNG (APLNG), Gladstone LNG (GLNG) and
Queensland Curtis LNG’s (QCLNG) plans to
co-ordinate their maintenance schedules, pro-
viders and maintenance techniques for another
five years. provide detailed information, including forecast
The commission said it was consulting on a maintenance events for a 12-month advance
draft determination that would allow all three period.
applicants to continue co-ordinating mainte- The Council of Australian Governments
nance breaks and that it was accepting submis- (COAG) Energy Council endorsed a regulation
sions until May 25. The ACCC will then make its impact statement (RIS) in March 2020 that con-
final decision. tained amendments to the National Gas Law
The ACCC first authorised the co-ordina- (NGL) to improve gas market transparency. The
tion of maintenance schedules in 2016, with that ACCC said these new transparency measures
approval expiring on May 6. were expected to be introduced under the NGL
The initial authorisation was aiming at pre- by the end of 2022.
vent disruption to the local wholesale gas mar- The ACCC does not agree with the LNG
kets that could be caused by export facilities plant operators’ argument, however, noting that
redirecting their feedstock to domestic buyers the transparency measures under the NGL only
during maintenance periods. require the companies to report their mainte-
Moreover, while each LNG facility leans on nance co-ordination plans for that 12-month
upstream operations in the Surat and Bowen window and not beyond. It worries that longer-
basins, they also source gas from the local whole- term, unreported co-ordination could disadvan-
sale market. Wholesale gas traders raised con- tage other market participants.
cerns in 2016 that co-ordination between LNG “At this stage we consider that all information
producers would allow them to trade advan- shared amongst producers should be disclosed
tageously in gas markets, because each would to the rest of the market, including information
know when maintenance is going to occur. that relates to activity beyond 12 months,” Sims
This prompted the ACCC to implement a said. “We consider it is important that the exist-
The ACCC has clause five years ago that stipulated that appli- ing reporting condition continues to apply, even
been concerned cants must publicly disclose information they though the LNG producers may be required to
with transparency share between themselves. The watchdog said it report some of this information following antic-
would extend this approval as long as that same ipated changes to the NGL.”
The ACCC has been concerned with trans-
on the East Coast condition is followed. parency on the East Coast gas market, frequently
“Co-ordinating the maintenance under-
gas market. taken at these facilities will reduce the likelihood accusing LNG exporters of selling gas to the local
of major disruptions to domestic gas markets, market at much higher prices than paid by inter-
which could occur if multiple maintenance national buyers.
events cause more than one facility to be taken While the commission acknowledged in
offline at the same time,” ACCC chair Rod Sims February the gap between domestic gas prices
said. and LNG netback levels had narrowed over the
He added: “The condition allows all mar- previous year, it said it was still unhappy at the
ket participants to know when maintenance is price difference.
going to occur and to make sure that they are not “We welcome the narrowing of the once-large
exposed to unnecessary risk.” gap between domestic and export parity prices,
The three LNG producers, however, have but despite some improvement domestic cus-
argued that the condition is not needed owing tomers are still paying more than overseas cus-
to a package of transparency measures expected tomers,” Sims said at the time.
to be implemented under the National Gas Law He added: “LNG producers have not pro-
(NGL) during the next five-year authorisation. vided an adequate explanation as to why this is
The measures will require LNG exporters to the case, or why we should accept it.”™

Week 18 07•May•2021 www. NEWSBASE .com P11