❓ Mr Bowler asks about reducing gas transmission costs on the Goldfields Gas Transmission Pipeline (GGT). The Minister outlines the regulatory process involving the National Competition Council (NCC) and explains price differences compared to the Perth-Bunbury pipeline due to economies of scale.
AnsweredQoN 2053Legislative Assembly
QuestionView source ↗
(1) Will the Minister advise if there is an opportunity to bring down the cost of gas transmission on the Goldfields Gas Transmission (GGT) Pipeline?
(2) Would any such opportunity involve the intervention of the Australian Competition and Consumer Commission?
(3) Will the Minister advise why gas prices in the Goldfields are higher than those on the Perth-Bunbury pipeline?
(2) Would any such opportunity involve the intervention of the Australian Competition and Consumer Commission?
(3) Will the Minister advise why gas prices in the Goldfields are higher than those on the Perth-Bunbury pipeline?
AnswerView source ↗
Answered
14 October 2003
Responded by
Minister for Energy
Response time
21 days
On 26 March 2003, the owners of the Goldfields Gas Pipeline (GGP) lodged an application with the National Competition Council (NCC) to revoke coverage of the GGP under the National Third Party Access Code for Natural Gas Pipeline Systems (the Code ). On 8 September 2003, the NCC published its Draft Recommendation not to revoke coverage of the GGP under the Code. The Draft Recommendation is now open for public submissions until close of business on Thursday 16 October 2003. As relevant Minister under the Code, I am expecting the NCC to submit its Final Recommendation to me on 27 November 2003, following which I will make my decision, in accordance with the Code, on the revocation of coverage of the GGP under the Code. If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
On 8 September 2003, the NCC published its Draft Recommendation not to revoke coverage of the GGP under the Code. The Draft Recommendation is now open for public submissions until close of business on Thursday 16 October 2003. As relevant Minister under the Code, I am expecting the NCC to submit its Final Recommendation to me on 27 November 2003, following which I will make my decision, in accordance with the Code, on the revocation of coverage of the GGP under the Code. If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
As relevant Minister under the Code, I am expecting the NCC to submit its Final Recommendation to me on 27 November 2003, following which I will make my decision, in accordance with the Code, on the revocation of coverage of the GGP under the Code. If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
(2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
(3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
On 8 September 2003, the NCC published its Draft Recommendation not to revoke coverage of the GGP under the Code. The Draft Recommendation is now open for public submissions until close of business on Thursday 16 October 2003. As relevant Minister under the Code, I am expecting the NCC to submit its Final Recommendation to me on 27 November 2003, following which I will make my decision, in accordance with the Code, on the revocation of coverage of the GGP under the Code. If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
As relevant Minister under the Code, I am expecting the NCC to submit its Final Recommendation to me on 27 November 2003, following which I will make my decision, in accordance with the Code, on the revocation of coverage of the GGP under the Code. If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
If the GGP remains covered under the Code it will be the Western Australian Independent Gas Pipelines Access Regulators decision to determine the reference tariff for gas transmission on the GGP. If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
If GGP’s coverage under the Code is revoked, the tariff will be in accordance with the provisions of the Goldfields Gas Pipeline Agreement Act 1994 which provides the Government with a mechanism to negotiate tariffs applying to the GGP. It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
It is not appropriate for me to express an opinion on the GGPs revocation of coverage under the Code, as I am required, as the relevant Minister under the Code, to decide on this issue once the NCC submits its Final Recommendation to me. (2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
(2) The Australian Competition and Consumer Commission is not involved in this process, as it is not the relevant regulatory body regarding reference tariffs for the GGP. My decision on the revocation of coverage of the GGP under the Code will determine whether the Regulator or the State Agreement will regulate reference tariffs for the GGP. (3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
(3) In essence the difference in gas prices between the GGP and the Dampier to Bunbury Natural Gas Pipeline (DBNGP) is due to the DBNGP having greater economies of scale resulting from a significantly larger volume of transported gas. While the DBNGP has a capital value of approximately four times that of the GGP, it transports approximately six times the volume of gas. Consequently, it is able to spread its costs over a larger base and provide a lower cost per unit.
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