Progress in the NSW gas market!

01 Jan 2000Archived News Climate Change Matters

The NSW gas market is a very different place than at the beginning of 2000. Major changes have occurred in the retail and distribution sectors, and the news is all good for customers.


The NSW gas industry has experienced significant changes over the last few months. From a virtual monopoly in the markets supplied by the Moomba-Wilton pipeline, AGL is now faced with unprecedented levels of competition. Increasing numbers of retailers are entering the market, facilitated by the opening of the Eastern Gas (Duke) Pipeline transporting gas from Bass Strait to the Canberra, Wollongong, Sydney and Newcastle markets. Currently there are 6-7 retailers providing competitive prices to NSW customers.

As the shockwaves reverberate around AGL's gas retail business, the gas distribution side of the company has been battling with IPART in an attempt to protect its income stream. Negotiations on the new NSW gas pipeline Access Arrangement have ended with real contract revenue and real average network prices to fall substantially by June 2004. As such the new charges are expected to provide savings to customers, with many sites seeing immediate network cost savings in the order of 30-35%.

Under the new NSW Access Arrangement, customers now have several options available as to how their gas distribution charges are structured. It is important that gas users investigate these new options to ensure they are using the service best suited to their operations.

1. Capacity Reservation Service

This service is similar to that which most sites are currently on.

Charge determined on $/GJ of MDQ, where the customer sets an appropriate MDQ

Charges are payable for overruns, with significant penalties for more than 9 overruns in a year.

MDQ options for summer tranche capacity and short-term capacity are available - note that these options are for increases in MDQ only.

2. Managed Capacity Service

Charge determined on $/GJ of MDQ where MDQ is set at the highest MDQ reached over previous year.

No overrun charges.


3. Throughput Service

Charge determined by $/GJ throughput.

No overrun charges.

Charges generally higher than the Capacity Reservation and Managed Capacity Service.


4. Tariff Service

Available for sites using less than 10TJ per annum.

Charge determined by $/GJ throughput plus a fixed service charge.

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