In a move that has upset some local gas buyers the ACCC has given the green light to the Gorgon Gas Project joint venture to jointly market its gas to the Western Australian domestic market.
The interim authorisation decision means the Gorgon participants - Chevron, Shell and ExxonMobil - will be able to continue to engage with potential customers while the ACCC assesses the substantive applications for authorisation.ACCC chairman, Graeme Samuel, said the commission accepts that the joint venture participants need to engage with the market before making a final investment decision (FID) on Gorgon.
Mr Samuel said the ACCC considers that granting interim authorisation is unlikely to result in irreversible changes to the market, particularly since any gas sales agreements entered into during the period of interim authorisation would be conditional on the ACCC granting final authorisation.
Several interested parties have raised concerns about providing commercially sensitive information to the joint venture participants under an interim authorisation. In order to address this concern, the ACCC has decided that "interim authorisation will only come into effect once the applicants have had their ring fencing arrangements independently audited and any changes required to make them effective have been implemented."
The ACCC has also confirmed that it may review its decision on interim authorisation at any time. The commission is undertaking public consultation on the substantive applications for authorisation, with a draft determination scheduled to be handed down by September 2009.
DOMGAS ALLIANCE CONCERNS
Meanwhile, the DomGas Alliance has voiced its concerns over the ACCC's decision, and has lodged a detailed submission to the ACCC calling on it to reconsider the interim authorisation.
DomGas Alliance chairman Stuart Hohnen claimed that the decision potentially sets back competition in the WA gas market for decades.
"The WA domestic gas market is already characterised by a serious lack of competition with just two supplier groups controlling almost 100 per cent of the market," Mr Hohnen said. "As a result, WA consumers are paying around four to five times the price of gas than consumers in the Eastern States.
""Separate selling is commercially and practically feasible. There is nothing preventing Shell, Chevron and ExxonMobil from selling separately and competing with each other. They are already selling separately to international customers and have been doing so since as early as 2005."
The Alliance's members include Dampier Bunbury Pipeline, Alinta, Synergy, Verve Energy, Burr-up Fertilisers and Fortescue Metals Group.