Unlocking more gas supply is a key element of the Morrison Government's gas fired recovery. Getting more local gas to market is the best way to lower prices for Australian gas users and enhance energy security.
Australian governments are seeking stakeholder feedback on a consultation paper that seeks to increase liquidity and flexibility in the east coast gas market through enhancements to the Wallumbilla Gas Supply Hub and the pipeline capacity trading framework.
Minister for Industry, Energy and Emissions Reduction Angus Taylor said while the Wallumbilla Hub has played a positive role in the east coast gas market since its establishment in 2014, there is more to do so it can meet its full potential.
"Our vision is for Wallumbilla to become the Henry Hub of Australia - the key gas trading point. To do this, we need to work with industry to reform the market to increase the number and volume of gas trades at Wallumbilla," Minister Taylor said.
"This work will help to establish a unique domestic reference gas price that will allow gas producers and consumers to have greater confidence in their ability to trade, hedge and make long-term investments.
"Pipeline capacity trading reforms will aim to build on the success of the Day Ahead Auction, which has saved gas users up to $60 million in annual pipeline transportation charges, supported lower wholesale spot prices and enabled competitively priced gas to flow to where it is needed most.
"We understand that unlocking more supply and establishing well-functioning markets is fundamental to increasing competition and driving down gas prices. This is a key part of the gas-fired recovery, and will ensure Australian gas is working for all Australians."
The consultation paper identifies current barriers that impede liquidity at Wallumbilla and suggests potential options to grow the hub, such as anonymised trading, a market maker regime and the establishment of a virtual trading hub.
Stakeholder feedback on these options will inform development of a roadmap for Energy Ministers to consider in early 2022. The roadmap will set out a plan of potential market reforms and next steps to consider the implementation of the best options.
The consultation paper follows an agreement by Energy Ministers in June to pursue a further package of priority reforms to support liquidity, competition and investment in the gas market.
The consultation paper has been developed by the Commonwealth, states and territories, with input from energy market bodies ACCC, AEMC, AEMO and the AER.
