ACCC proposes LNG facility maintenance schedule coordination

The Australian Competition and Consumer Commission (ACCC) has announced that it has issued a draft determination proposing to authorise Australia Pacific LNG Pty Ltd, Gladstone LNG, and the Queensland Curtis LNG Project to discuss their maintenance schedules, maintenance providers and maintenance techniques.

The ACCC said that it proposes to grant authorisation for five years, subject to a condition. It has also granted conditional interim authorisation to allow the LNG producers to discuss their plans for maintenance at each project in 2H16.

ACCC Chairman, Rod Sims, said: “Coordinating maintenance schedules at these facilities will reduce the potential for costly delays and allow the LNG producers more efficiently to manage the large quantities of natural gas that flow to their facilities.”

Wholesale gas traders in Australia have raised concerns that coordination of maintenance will result in damaging information asymmetries, as LNG facility maintenance can result in large changes to the wholesale price of gas. As such, the ACCC is proposing to impose a condition of authorisation requiring the LNG producers to publicly disclose maintenance schedule information that they share with each other. Interim authorisation is also subject to this condition.

ACCC said that it has formulated the proposed condition in consultation with the LNG producers and market participants.

Mr Sims added: “These LNG producers can create significant volatility in domestic gas markets when they go offline for maintenance. The condition allows all market participants to know when maintenance is going to be occurring and to make sure they aren’t exposed to unnecessary risk.”

Forecasts

The Australian Energy Market Commission (AEMC) has released a draft recommendation that the LNG producers be required to publish two-year forecasts of their LNG facilities’ capacity and gas demand, including any scheduled downtimes.  However, the ACCC proposes to confine the scope of the condition to remedying information asymmetry issues that arise directly from the proposed conduct (i.e. information about scheduled maintenance).

The ACCC said that it is seeking submissions on its draft determination, including the proposed condition of authorisation, before making a final decision.

Edited from press release by Callum O'Reilly

Read the article online at: https://www.lngindustry.com/liquefaction/19022016/accc-proposes-lng-facility-maintenance-schedule-coordination-2018/