The agreement was reached at the most recent meeting of the MCE, held last Friday in Brisbane. The MCE comprises the Federal, State and Territory energy ministers. The Senior Committee of Officials, which supports the Ministerial Council, has been tasked with developing the review's terms of reference.

"The AGA has been calling for a review of the national gas access regime and National Gas Code for some time, so this is a very welcome development" said the chief executive of the AGA, Bill Nagle. "Significantly, this is the first time the State, Territory and Federal governments have collectively committed themselves to a review of the Code.

"It is crucial that the forthcoming review puts into effect for the gas industry the findings and recommendations of the Productivity Commission's Review of the National Access Regime, and recommendations put forward recently by the Energy Market Review on improving the regulatory regime to encourage the development of the gas network.

"Ideally, the AGA would like to see the Productivity Commission undertake the review, given the expertise it developed during its review of the wider access regime.

"The Code requires urgent review and significant amendments, to ensure it does not continue to deter investment in the development of Australia's gas network. At present, numerous proposals for new gas distribution networks and pipelines are being put on the shelf, due to the restrictive nature of the Code and the gas access regime.

"The Code is currently not flexible enough to ensure that gas infrastructure investors can justify taking the risks inherent in developing major, long-lived investments, and in expanding existing infrastructure. It needs to be amended to ensure it balances short-term consumer interests with the long-term consumer interest of having access to natural gas through an expanding gas network.

"The Code could be improved through measures including the introduction of specific mechanisms (such as 'access holidays') to facilitate new investment in gas infrastructure, and the incorporation of access pricing principles to guide regulators in making decisions that reflect the long-term consumer interest of having an expanding gas network.

"The AGA looks forward to the commencement of the review next year, and stands ready to assist during the review process."