Measure of new code will be investment says APPEA

The No.1 test of the Federal Government's newly completed Mandatory Gas Code of Conduct will be whether it delivers the confidence producers require to make much-needed investment in new gas supply, according to APPEA. APPEA chief executive Samantha McCulloch. Australian Petroleum Production & Exploration Association (APPEA) chief executive Samantha McCulloch said it appeared the government had taken on board some of the industry’s feedback. "However we await the final text of the Code to fully understand whether the industry’s concerns and recommendations have been addressed," she said. At a time when Australian households and businesses were facing cost-of-living pressures, a range of independent authorities had made it clear that bringing on new gas supply was the key to putting sustained downward pressure on prices and ensuring supply security for manufacturers, power generators and households, she said. Related: IPL facing $90m hit from Phosphate Hill gas shortfall The full Gas Code will be released in coming weeks once legal drafting has been completed and the Federal Executive Council has ratified the instrument. It includes a price cap, which is to be set at $12/GJ (with a review commencing by July 2025); a process for qualifying for exemptions from the price cap; and an allowance for small producers of gas to be exempt from the price cap if they supply only the domestic market. Resources Minister Madeleine King said it also required all participants to abide by standards of conduct to level the playing field in contract negotiations between users and producers and deliver a better functioning, more competitive gas market. Ms King said the Gas Code would ensure Australian gas was available for Australian users at reasonable prices, give producers the certainty they need to invest in supply, and ensure LNG producers met their export commitments. "Producers have already offered indicative domestic supply commitments under the new framework of at least 260 PJ to 2027," she said in a joint statement with Treasurer Jim Chalmers and other ministers. "These indicative commitments will reduce the risk of shortfalls as assessed by the ACCC and AEMO." Related: State grants to fire up gas exploration She said the final design of the Gas Code placed a greater emphasis on: - Securing additional domestic supply commitments in the short term to anchor prices at $12/GJ and shield east coast gas consumers from volatile international gas prices. - Facilitating certainty for investment in new supply to avoid projected shortfalls and sustain reasonable domestic gas prices over the medium term. The Gas Code will be enforced by the ACCC, with a review to be undertaken no later than two years after coming into effect, to ensure the Gas Code remains effective and fit for purpose.

Measure of new code will be investment says APPEA

Industry Queensland

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