Page 10 - AsianOil Week 18 2021

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

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