ACCC increases gas industry transparency

The Australian Competition and Consumer Commission (ACCC) has started publishing LNG netback prices to improve price transparency for east coast gas users.

LNG netback price is an export parity price that a gas supplier can expect to receive for exporting gas and represents the price that the supplier would expect to receive from a domestic buyer, indifferent to selling domestically and exporting

The decision to publish these figures came after the current ACCC gas inquiry, which commenced in April last year, showed that many domestic east coast buyers were receiving supply offers at prices well in excess of LNG netback prices.

“The prices paid by domestic gas users could also depend on demand and supply,” said ACCC Chair Rod Sims.

“If there were sufficient additional gas produced to fill existing LNG train capacity, excess gas available to the domestic market could see prices below the LNG netback price.

“This was a clear sign to us that the gas market in the east coast was not operating effectively.

“Domestic gas buyers clearly should not have to pay more for gas produced in Australia than the overseas buyers.”

This information is designed to fill an information gap that has existed since LNG producers in Queensland began to export gas in 2015.

“Since the linking of the east coast and international gas markets, gas users have not had access to readily available information about export parity prices and how they are calculated,” said Mr Sims.

“Gas users have regularly commented to us that our publication of gas prices and LNG netback prices in our interim gas reports helps them in their gas supply negotiations.

“Publication of LNG netback prices on our website will further improve gas price transparency and reduce the information imbalance between gas buyers and sellers.”

Mr Sims also encouraged state governments to implement policies to manage gas development risks rather that placing moratoria and restrictions on production.

Over the course of the gas inquiry, the ACCC will publish additional information on its website to assist gas users, including information on transportation charges.

Click here to access the ACCC’s LNG netback price series.

If you have company news you would like featured in Gas Today contact Assistant Editor David Convery at dconvery@gs-press.com.au

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