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The gas industry is broken up into the following markets:
Historically, South Australia's main source of natural gas has been sourced from the Cooper/Eromanga Basin, which is located in northern South Australia and southwest Queensland. The associated natural gas processing plant is located at Moomba in South Australia and supplies both New South Wales and South Australia with processed natural gas.
However, from the beginning of 2004 the SEA Gas pipeline commenced operating, enabling natural gas to be transported from the Otway Basin in Victoria into South Australia. For more information on the production and exploration of natural gas in SA, refer to www.pir.sa.gov.au .
Transmission pipelines transport natural gas under high pressure from the gas basins (or fields) into distribution networks or directly to large industrial customers. There are three main transmission pipelines in South Australia:
Natural gas transported by transmission pipelines through the distribution network to the end-use customer. Envestra Ltd is the owner of the South Australian gas distribution network (www.envestra.com.au).
Gas retailers sell natural gas to end-use customers. Retailers will generally sell natural gas to residential, small business and large industrial customers. Effective competition in the South Australian gas retail market commenced on 28 July 2004. More information on the retail gas market refer to ESCOSA's Energy Consumer Toolkit .
The Council of Australian Governments in 1994 made a commitment to achieve "free and fair trade in natural gas", and from this developed the principles of third party access to the gas pipelines network. Subsequently a National Third Party Access Code ("the Code") and associated regulatory framework was developed to stimulate competition in the natural gas sector, optimise the use of Australia's gas resources and assist in reducing prices for gas consumers.
The national access Code establishes the rights and obligations of pipeline operators and users in relation to third party access to natural gas transmission and distribution. It is designed to replicate competitive market outcomes where there are monopoly pipelines facilities serving a market in which regulation of third party access is necessary to ensure the competitive supply of gas.
The Gas Pipelines Access (South Australia) Act 1997 establishes ESCOSA as the South Australian regulator in applying the Code to the gas distribution system in South Australia. The Australian Competition and Consumer Commission (ACCC) is the access regulator for transmission pipelines across all of Australia except Western Australia.
For more information on the Code, refer to the Code Registrar's website at www.coderegistrar.sa.gov.au .
Full retail competition in the South Australian gas industry commenced on
28 July 2004. From this date, gas customers have been able to choose the retailer and gas contract that suits their household.
As part of the customer protection measures introduced to support the introduction of competition, the South Australian Government conferred retail pricing regulatory powers on the Essential Services Commission of South Australia (ESCOSA).
Similar to the electricity industry, the Gas Act requires the incumbent gas retailer to offer a standard contract. The standing contract will apply to all small customers (those consuming less than 1 TJ) unless they elect to transfer to a market contract.
To date, customer transfer numbers published by ESCOSA, indicate that small customers are increasingly taking advantage of retail competition with a large number of small customers transferring (or in the process of transferring) to market contracts.
To learn more about the role of ESCOSA, market contracts or the customer transfer numbers, refer to the ESCOSA website at www.escosa.sa.gov.au .
Regulation and Planning