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Australia – Wallumbilla Gas Supply Hub Now Open For Business.

30 June, 2014

 

Legal News & Analysis – Asia Pacific – Australia –  Energy & Project Finance

 

What You Need To Know

 

  • Trading through the Wallumbilla Gas Supply Hub has commenced.
  • The Wallumbilla Gas Supply Hub is the first voluntary gas supply hub in Australia, and in the first weeks of operation has already traded around 60 terajoules of gas. 
  • Registrations for the Wallumbilla Gas Supply Hub opened on 2 December 2013 and at market start there were eight registered trading participants with more industry stakeholders indicating their interest in participating.


What You Need To Do


If you are already registered to participate in the Wallumbilla Gas Supply Hub you should ensure you are:

 

  • familiar with the terms of the Gas Supply Membership Agreement and the Gas Supply Exchange Agreement; and 
  • able to meet your delivery obligations under the Gas Supply Exchange Agreement (which may include amendments to your gas transportation agreements).

If you have not yet registered an application for registration and the Gas Supply Membership Agreement can be obtained through the Australian Energy Market Operator’s website here.

 

Wallumbilla Gas Supply Hub Comes Online 


Commodity trading has commenced at the Wallumbilla Gas Supply Hub (Wallumbilla Hub). The Wallumbilla Hub is Australia’s first voluntary gas supply hub. 


The commencement of trading marks the beginning of an exciting new chapter in the development of Australia’s, and specifically Queensland’s, domestic gas industry.
Registrations for the Wallumbilla Hub opened on 2 December 2013 and at market start there were eight registered trading participants with more industry stakeholders indicating their interest to trade by mid-to late-2014.

 

Background To The Wallumbilla Hub 


The Wallumbilla Hub is a voluntary gas trading exchange which facilitates the wholesale trading of natural gas. The Wallumbilla Hub allows participants to place anonymous offers to sell, or bids to buy, gas at specified quantities for a specified price. The offers and bids are then automatically matched on the electronic exchange platform to form transactions. The electronic exchange platform is managed by the Australian Energy Market Operator (AEMO). 


The Wallumbilla Hub was developed by the Standing Council on Energy and Resources, in consultation with the AEMO, as a response to the rapidly expanding east coast gas markets and the increasing demands to enhance the transparency and reliability of upstream gas transactions.

 

The Wallumbilla Hub will allow participants to:

 

  • buy and sell gas on standardised terms and conditions at specified delivery points; 
  • trade spot and day-ahead products; and
  • trade forward contracts for the first time.

AEMO’s original forecasts were that once up and running, the Wallumbilla Hub would trade around 50 terajoules of gas within the first three months of operating. These forecasts have been shown to be quite conservative as the Wallumbilla Hub has already exceeded these forecasts by trading more than 60 terajoules of gas in only the first few weeks of operation.


Considering the number of industry stakeholders who have indicated their interest to trade, but have not yet become registered participants, it is expected that the amount of gas traded will continue to rise as we progress towards the end of the financial year. 


Accordingly, we expect the Wallumbilla Hub to play an increasingly important role in Australia’s domestic gas supply markets. 


What Do You Need To Do 


If you are already registered to participate in the
Wallumbilla Hub you should ensure you are:

 

  • familiar with the terms of the Gas Supply Membership Agreement and the Gas Supply Exchange Agreement; and 
  • able to meet your delivery obligations under the Gas Supply Exchange Agreement (which may include amendments to your gas transportation agreements).

If you have not yet registered, but would like to participate in the Wallumbilla Hub, it’s not too late. Applications for registration can be made through the AEMO’s website here.

 

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For further information, please contact:

 

Paul Newman, Partner, Ashurst
paul.newman@ashurst.com

 

Peter Limbers, Partner, Ashurst 
peter.limbers@ashurst.com

 

Shane Bosma, Ashurst
shane.bosma@ashurst.com

 

David Morgans, Ashurst
david.morgans@ashurst.com

 

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