AGL said the MCE had today revealed the legislative and regulatory framework to be put in place for greenfields gas transmission pipelines in Australia.
AGL explained the regulatory environment to be put in place meant commercial forces would dictate the transportation tariff charged on gas sourced from the pipeline.
“The announcement facilitates the setting of tariffs on the Australian component of the pipeline through commercial forces for the first 15 years of the pipeline’s operations rather than by a regulatory process,” AGL managing director Paul Anthony said.
“All buyers of PNG gas will benefit from the arrangements requiring the pipeline to provide open access and non-discriminatory pricing. This underpins the ability of PNG gas to provide an alternative source of competitively priced energy to growth markets in Queensland and the Northern Territory as well as the established markets of NSW, Victoria and South Australia.”
Anthony said the new framework had “provided certainty” on Federal and State Government policy and also marked significant step in the development of the proposed PNG to Australia pipeline. The Bill is expected to be introduced into the South Australian parliament shortly.
“The policy leadership of the Federal Industry and Resources Minister as well as all State Energy Ministers in reaching this important decision will create long-term national benefits for both Australia and PNG,” he said.
Earlier this year, AGL, which holds a 10% stake in the larger PNG Gas project, signed the first gas sales agreement to NRG Flinders in South Australia. NRG Flinders agreed to acquire more than 100 petajoules of gas from AGL to meet its requirements at the 180MW Osborne Cogeneration Plant in Adelaide.
The gas supply agreement between the two companies was extended from 2010 to 2018, conditional upon the PNG Gas project proceeding.
Yesterday, the Australian Competition and Consumer Commission gave the final tick of approval for the joint sale and marketing of gas from the PNG-Queensland pipeline by the project participants within Australia.
