PROJECTS

Pipeline regulation to support a liquid wholesale gas market

The problem

A boom in LNG exports drove up gas prices in Australia’s East Coast wholesale gas market and, by linking domestic gas prices to global oil prices, threatened increased price volatility and physical shortages. In response, the Australian Energy Market Commission (AEMC) aimed to create a deeper, more liquid wholesale market. Existing regulatory powers allowed third-party access to the privately-owned gas transmission pipelines to be mandated, but AEMC worried that this might not be enough.

How we helped

AEMC commissioned Castalia to provide an expert opinion on whether mandating third-party access to gas pipeline would be effective in creating a liquid, efficient market. We drew on our experience with the application of the Australian third-party access regime to rail and port sectors, and our knowledge of wholesale gas markets, to assess whether mandating third-party access would work to create a more liquid wholesale gas market. We found that it would not and that a bespoke regulatory regime was required.

Impact

AEMC relied on Castalia’s report and recommended that it be given new statutory powers to create a pipeline capacity market to complement other reforms (including creation of gas trading hubs with transparent pricing). The reform package is expected to result in an annual increase in Australia’s Gross Domestic Product of between $500 million and $3.3 billion by 2040.

Our team

Alex Sundakov

Alex Sundakov

Executive Director
Peter Hoogland

Peter Hoogland

Director

How can we help you?

How can we help you?

WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America

SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia

AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand

WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand

PARIS
+33 (0)1 84 60 02 00
64-66 Rue des Archives
France

BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia

Thinking for a better world.

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WASHINGTON, DC
+1 (202) 466-6790
1747 Pennsylvania Avenue NW, Suite 1200
United States of America

SYDNEY
+61 (2) 9231 6862
Suite 19.01, Level 19, 227 Elizabeth Street
Australia

AUCKLAND
+64 (4) 913 2800
74D France Street, Newton South
New Zealand

WELLINGTON
+64 (4) 913 2800
Level 2, 88 The Terrace
New Zealand

PARIS
+33 (1) 73 44 26 97
6 Rue Duret
France

BOGOTÁ
+57 (1) 508 5794
Calle 81 #11-08, Piso 5, Oficina 5-127
Colombia

Thinking for a better world.

Castalia-logo-negative-2col
PROJECTS        NEWS        BLOG        CONTACT
© Copyright 2019 Castalia. All rights reserved.
Terms | Privacy | Credits | Sitemap