Methanex, in a submission to the Commerce Commission, says it generally agrees with the commission's draft analysis and conclusions. It believes there would be substantial competitive detriments of joint marketing - higher than otherwise gas prices; and the ability to price discriminate.
Methanex further says joint marketing would give the Pohokura partners the ability to dictate contract terms, and the ability to inhibit development of liquidity in this country's gas market.
NGC's submission says the commission's draft determination - into Shell New Zealand. Todd Energy and OMV Petroleum's application to jointly market and sell Pohokura gas - overstates the benefits while understating the detriments.
It believes robust conditions should be imposed on any commission authorisation, to minimise harm to the public interest.
Contact Energy is more forthright, saying joint marketing of Pohokura gas should not be authorised. It says it does not believe that separate marketing requirements would necessarily result in development delays, as claimed by the Pohokura partners.
"The avoidance of delay is not a benefit sufficient to outweigh the significant detriments that will occur from joint marketing," says Contact.
Methanex agrees that an early onstream date would be of significant public benefit, given the "paramount importance" of the timely development of Pohokura. However, in all other respects, the effect of joint marketing over separate marketing is negative or at best neutral.
Methanex says Pohokura has huge potential as a catalyst to a more competitive and liquid gas market and considers the only factors that may delay the start date would be the negotiation of the gas balancing and product allocation agreements.
It says there is no reason why separate marketing should result in increased appraisal and design costs. The Pohokura partners would still jointly agree on development sizing and concepts. Any subsurface risks would equally apply under joint or separate marketing models.
NGC says robust conditions should ensure potential benefits are realised, while minimising "the harm to competition".
It suggests fully independent ring-fencing of the sales process; joint selling of gas from the date of the authorisation being granted to the end of 2007; limiting the amount of gas that can be jointly sold to the percentage of P90 reserves necessary to ensure the economic development of the field; and restricting any authorisation to existing parties.
Contact says that if the commission confirms its draft decisions and allows joint marketing and selling, then only certain conditions will secure the benefits and avoid the detriments identified by the commission.
Contact suggests allowing only joint marketing and selling sufficient for initial field development; binding contracts signed no later than December 2003 (which should include a "first gas" date); and limiting the ability of the Pohokura partners to impose restrictive conditions on the sale of gas, such as high "take" obligations or on-sale restrictions.
The commission last month found joint marketing and selling would be to the significant detriment of the New Zealand public. However, the potential public good could outweigh that detriment if the Pohokura partners agreed to ring-fencing, limiting authorisation to five years, "first gas" from February 2006, and no authorisation for any successive partners.
The commission is to hold a three-day conference on its draft determination in Wellington early next month.
