On 19 April 2017, the Australian Government directed the ACCC to conduct a wide-ranging inquiry into the supply of and demand for wholesale gas in Australia. The ACCC is required to submit interim reports no less frequently than every six months and provide information to the market as appropriate, with a final report to be submitted by 30 April 2020.
The first interim report, issued on 25 September 2017, found a substantial shortfall for the east coast was likely in 2018.
Following the first interim report, on 3 October 2017, the Australian government reached a heads of agreement with the Queensland LNG producers requiring them to supply more gas in to the Australian domestic market. The agreement states that the ACCC will be monitoring the LNG exporters’ compliance with the heads of agreement, as well as the sales, offers to sell and bids declined of the other suppliers.
On 13 December 2017, the ACCC released the second interim report, focusing on the operation of the East Coast Gas Market, where there are continuing immediate and longer-term concerns. The ACCC reports that although there have been important short-term improvements in conditions, the market is still not operating as a well-functioning and competitive market.
On 27 April 2018, the ACCC released the third interim report, which continued the focus on the operation of the East Coast Gas Market. The ACCC reports that while recent improvements in conditions have been maintained, the East Coast Gas Market is still not functioning effectively. The ACCC also reports on developments in gas price transparency, including its decision to regularly publish LNG netback prices.
On 2 August 2018, the ACCC released the fourth interim report, which continued the focus on the operation of the East Coast Gas Market. The ACCC reports that while there have been recent improvements in the gas supply outlook and operation of the East Coast Gas Market, many gas users find market conditions extremely challenging as gas prices remain significantly higher than historical levels. The ACCC reports on the transparency measures it is developing, including an LNG netback price series and a framework for the reporting of reserves and resources information.
For the remainder of the inquiry, the ACCC intends to release three interim reports each year. The ACCC expects these reports to be released in April, July and December each year, although these time frames may vary. In general, the following key topics will be included:
Supply and demand balance
Supply and demand balance
In addition to these regular topics, the inquiry will undertake analysis into a number of other areas of interest. Examples of these potential topics are:
- issues related to pipeline and storage facilities
- retailer pricing, costs and revenues
- reserves and resources
- key factors influencing domestic gas prices.