The Federal Government is requesting feedback from stakeholders on a consultation paper that is aiming to increase liquidity and flexibility in the east coast gas market, through upgrades to the Wallumbilla Gas Supply Hub and the pipeline capacity trading framework.
The consultation paper identifies current barriers that impede liquidity at Wallumbilla and suggests potential options to grow the hub, such as anonymised trading, a market maker regime and the establishment of a virtual trading hub.
The consultation paper has been developed by the Federal Government, states and territories, with input from energy market bodies ACCC, AEMC, AEMO and the AER.
Federal Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said while the Wallumbilla Hub has played a positive role in the east coast gas market since its establishment in 2014, there is more to do so it can meet its full potential.
“Our vision is for Wallumbilla to become the Henry Hub of Australia – the key gas trading point. To do this, we need to work with industry to reform the market to increase the number and volume of gas trades at Wallumbilla,” Mr Taylor said.
“This work will help to establish a unique domestic reference gas price that will allow gas producers and consumers to have greater confidence in their ability to trade, hedge and make long-term investments.
“Pipeline capacity trading reforms will aim to build on the success of the Day Ahead Auction, which has saved gas users up to $60 million in annual pipeline transportation charges, supported lower wholesale spot prices and enabled competitively priced gas to flow to where it is needed most.
“We understand that unlocking more supply and establishing well-functioning markets is fundamental to increasing competition and driving down gas prices. This is a key part of the gas-fired recovery, and will ensure Australian gas is working for all Australians.”
The consultation paper follows an agreement by Energy Ministers in June 2021 to pursue a further package of priority reforms to support liquidity, competition and investment in the gas market.
Further details on the consultation process, including the consultation paper, Options to advance the east coast gas market, and instructions for providing feedback are available here.