Gas pipeline price negotiations

Article out just now in the AFR, have provided some summary points below. Assume it should be good for CTP…

Gas customers to get more clout in pipeline price negotiations

Gas pipeline owners face a further toughening-up of rules around tariff negotiations with customers under proposals intended to help lower prices for consumers.

The recommendations, being released on Tuesday by the Australian Energy Market Commission, represent the latest move driven by governments to address the unaffordability for gas for some east coast manufacturers and other industrial energy users.

Under the latest proposals, more pipeline services would be covered by formal access arrangements, contract terms would be "more balanced" while the arbitration system to be used when negotiations fail would be beefed up, the AEMC said.

New ways would be introduced to trade unused pipeline capacity, while both buyers and sellers would have access to better information. AEMC chairman John Pierce said that if implemented in full, the reforms would make it easier and cheaper to move gas around Australia, getting gas to where it is needed and most valued, and helping keep prices for both gas and electricity as low as possible.

"The changes we have recommended would help pipeline users negotiate lower prices and better deals for shipping gas," Mr Pierce said.