Gas suppliers and users have concluded negotiations and finalised a new voluntary Code of Conduct that will help ensure that the market is operating fairly and in the best interests of all participants, helping users to get the best deal.
The finalisation of the voluntary Code to support the negotiation of gas supply agreements (GSA) represents an important industry-led milestone under the gas-fired recovery. The gas industry has now agreed to implement the Code.
The Code reflects extensive collaboration between gas users and gas suppliers over the last 12 months.
This work has been led by the Australian Petroleum Production and Exploration Association (APPEA), representing suppliers, and the Australian Industry Group (AIG), representing gas consumers.
Minister for Industry, Energy and Emissions Reduction Angus Taylor welcomed the agreement and thanked the users and suppliers for their work to develop the Code.
“We know that a secure supply of gas is crucial to supporting jobs in Australia’s important energy intensive industries that are the lifeblood of our economy and our regions,” Minister Taylor said.
“This Code will help to level the playing field in the negotiation of gas supply agreements. Fortunately, Australian spot prices have remained 60 to 70 per cent below international prices, meaning Australian users have access to internationally competitive prices even in light of the energy crisis in Europe.
“The development and implementation of the Code is a key step in ensuring affordability and reliability for Australian gas users. We expect all participants to step-up and continue to behave in good faith throughout the life of the Code.
“The voluntary Code was not reached without extensive efforts from both sides of the gas sector, and the Government recognises this historic agreement between users and suppliers who worked together for the future of Australia’s gas industry.”
The Code will apply to the negotiation of gas supply agreements in the east coast domestic market, and will provide:
- standards to govern the conduct of gas suppliers in their interactions with gas consumers;
- pricing principles, referencing the ACCC LNG netback price series;
- increased transparency and certainty for gas consumers regarding negotiation processes;
- an equitable dispute resolution process, overseen by the appointment of an independent arbiter;
- a regular review process of the Code by an independent reviewer; and
- the promotion of good faith dealings between suppliers and consumers.
The voluntary Code forms one part of the Government’s gas-fired recovery measures that aim to unlock supply, deliver an efficient transportation network and empower consumers.
This follows on from recent announcements, including the delivery of the first full National Gas Infrastructure Plan and Future Gas Infrastructure Investment Framework to ensure more supply can be unlocked and delivered to where it is needed.
The Code will commence on 1 June 2022.
The Morrison Government called on the gas industry to develop a voluntary Code of Conduct as part of the September 2020 gas package announcement.
