Day Ahead Auction increases pipeline gas transport

Metrics for the new mandatory Day Ahead Auction (DAA) of contracted, but unnominated pipeline and designated compressor capacity, have been released by the AER.

The DAA commenced on 1 March 2019 as part of capacity trading reforms to increase liquidity in the secondary gas transportation network, and has enabled considerable access to what would previously have been unused pipeline and compressor transportation services in southern and eastern Australia.

The new metrics supplement existing wholesale gas liquidity metrics, adding transparency and further assisting market participants who wish to monitor or take part in the DAA.

To date, five participants have taken part in the auction; however, this number is expected to increase as more participants seek registration approval in the coming months.

Over the first five months of operation, more than 14.5PJ of capacity has been won on four pipelines and at two compression facilities, with the majority of auction activity taking place on the Moomba-Sydney Pipeline and South West Queensland Pipeline.

A significant proportion of this capacity has been won at or close to $0, facilitating the transportation of gas relatively cheaply from the north to southern markets and users.

There has been a number of instances of late data submissions leading to auction delays (see table below). In some cases, when data has not been received two hours after the cut-off time, a facility has been excluded from the auction.

Pipeline and compressor operators are reminded of their daily reporting obligations to submit data by the daily cut-off time of 5:30 pm.

The AER will be monitoring submissions to ensure data is provided by this cut-off time, so that the auction runs across all routes every day. Although yet to occur, if three or more facilities fail to supply auction quantities by 7:30 pm, the auction across the east coast will be cancelled.