ACCC proposing coordinated LNG facilities maintenance

The ACCC said in a statement on Thursday it has granted a conditional interim authorisation to the Australia Pacific LNG, GLNG and QCLNG facilities to discuss their plans for maintenance at each facility in the second half of 2016.

“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,” ACCC Chairman Rod Sims said.

The producers participate in the domestic gas market, buying gas for their facilities or selling excess gas and can redirect their gas to the domestic market when the facilities are offline. However, wholesale gas traders argue that LNG facility maintenance could result in large changes to the wholesale price of gas, and open door for damaging information asymmetries.

In order to avoid these issues, 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.

“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,” Sims said.

The Australian Energy Market Commission has released a draft recommendation that the LNG producers be required to publish two-year forecasts of their facilities’ capacity and gas demand, including any scheduled downtimes. ACCC has been requested by some market participants to impose the same requirements.

The current interim authorization comes into force immediately and will remain in place until the ACCC’s final determination comes into effect.

LNG World News Staff