National Gas (South Australia) (Market Transparency) Amendment Bill

Introduction and First Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (16:17): Obtained leave and introduced a bill for an act to amend the National Gas (South Australia) Act 2008. Read a first time.

Second Reading

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (16:17): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation and the explanation of clauses inserted in Hansard without my reading them.

Leave granted.

Over recent years, the east coast gas market has undergone a significant transformation, with a number of structural changes occurring on both the demand and supply sides of the market. In response to these changes, in 2015 Energy Ministers asked the Australian Energy Market Commission to conduct a review of the design, function and role of the facilitated gas markets and gas transportation arrangements in the east coast. At the same time, the Australian Competition and Consumer Commission was asked to review the state of competition in the east coast market. These two reviews recommended a range of reforms across the gas supply chain.

Informed by the findings and recommendations of these reviews, in August 2016, Energy Ministers agreed to implement gas market reform measures across four priority areas, including market transparency.

In 2018, a further review carried out jointly by the Australian Competition and Consumer Commission and the Gas Market Reform Group identified a range of information gaps and asymmetries across the eastern and northern Australian gas markets. In response, Energy Ministers tasked officials with developing a package of transparency measures to enhance transparency in the eastern and northern Australian gas markets.

In 2020, Energy Ministers endorsed the final recommended package of measures. The measures cover five main areas: gas, liquefied natural gas (LNG) and infrastructure prices, the supply and availability of gas including information about reserves and resources, information about demand for gas by large users and LNG exporters, information about infrastructure use and planned developments, and improvements to the Gas Statement of Opportunities published each year by the Australian Energy Market Operator.

Improved market transparency is intended to deliver a number of benefits including more efficient planning and investment across the market and more timely and accurate signals about how well the market is functioning. Market transparency is also intended to promote competition and the efficient trade of gas and infrastructure services.

The National Gas (South Australia) (Market Transparency) Amendment Bill 2021 includes changes to the National Gas (South Australia) Regulations and an initial set of National Gas Rules. The package will apply in the Australian Capital Territory, New South Wales, Queensland, South Australia, Tasmania and Victoria. The package will apply in the Northern Territory with the exception of the Darwin LNG and Ichthys LNG facilities and offshore gas fields supplying exclusively those facilities. In this respect, Energy Ministers also agreed, at the request of the Northern Territory Government, to alter the exemption in the Rules to allow flows of up to 10 PJ in any 12 month period to or from the exempt Northern Territory facilities.

The National Gas (South Australia) (Market Transparency) Amendment Bill 2021 (Amendment Bill) that I present to you today will amend the National Gas Law, set out in the schedule to the National Gas (South Australia) Act 2008. The amendment bill provides for the South Australian Minister to make the initial National Gas Rules that will implement the transparency reforms. Once the initial National Gas Rules have been made, the Minister will have no power to make any further Rules.

The amendment bill expands the scope of existing measures in the Law and adds new measures.

The amendment bill enables rules to be made to expand the scope of the Natural Gas Services Bulletin Board and the persons who must report information to the Australian Energy Market Operator for the Natural Gas Services Bulletin Board. The expanded scope will extend to the natural gas industry, which will encompass activities through the gas supply chain from gas exploration to end users. The initial National Gas Rules are intended to expand the scope of the Natural Gas Services Bulletin Board to require the reporting and publication of information about gas reserves and resources, short term gas sales and swaps, compression services, LNG processing facilities, LNG exports and imports, the use of gas by large users and facility development projects. The initial National Gas Rules are also intended to update other aspects of the rules relating to the Natural Gas Services Bulletin Board including registration arrangements.

The amendment bill enables rules to be made to require the assumptions about gas prices used to assess reserves and resources to be given to the Australian Energy Regulator and to allow the Australian Energy Regulator to publish that information on an anonymised basis. The initial National Gas Rules are intended to implement those measures.

The amendment bill removes out of date limitations on the scope of the gas statement of opportunities. It is intended that the initial National Gas Rules will specify additional information to be included in the gas statement of opportunities including information about gas production and LNG activities.

The amendment bill provides an enhanced framework for the Australian Energy Market Operator to collect information required for the gas statement of opportunities. The Australian Energy Market Operator will be tasked with making new procedures, to be called the Gas Statement of Opportunities (GSOO) procedures. The initial National Gas Rules are intended to require the new GSOO Procedures to establish a survey process, to be conducted at least annually. To support the survey, the amendment bill will impose a new obligation for persons with information required for the gas statement of opportunities to give the information to the Australian Energy Market Operator when required by the GSOO procedures.

The amendment bill will give the Australian Energy Regulator a new function to publish information about prices for goods and services in the natural gas industry. The initial National Gas Rules are intended to allow the Australian Energy Regulator to publish information relating to LNG import, export and netback prices and prices for natural gas under gas supply and gas swap agreements. It is intended that the initial Rules will allow the Australian Energy Regulator to determine the categories of price information, methodologies used and the frequency of publication. The initial National Gas Rules are intended to defer the commencement of gas price reporting by the Australian Energy Regulator until after the end of the Australian Competition and Consumer Commission's current Gas Inquiry in 2025.

The amendment bill will give the Australian Energy Regulator new powers to publish an instrument requiring information to be given to the Australian Energy Regulator for the purpose of its new gas price reporting function. The initial National Gas Rules are intended to require the Australian Energy Regulator to consult on the form of instrument.

The amendment bill will amend the list of matters for which Rules may be made by the Australian Energy Market Commission to support these new measures.

I commend this bill to members.