The start of commodity trading through the Wallumbilla Gas Supply Hub has marked the beginning of a new chapter in the development of Queensland’s natural gas industry.
Energy and Water Supply Minister Mark McArdle said the establishment of the trading exchange had been driven by the rapid growth of the Coal Seam Gas (CSG) industry in Queensland.
“The resources sector is a key driver of the four pillar economy the Newman Government is working to grow,” McArdle said.
“Demand for gas in eastern Australia is set to treble over the next 20 years,” he said.
In December 2012 the Standing Committee on Energy and Resources (SCER) tasked the Australian Energy Market Operator (AEMO) to progress the development of the hub.
The Wallumbilla in the name of the trading exchange refers to the location just east of Roma where the South West Queensland pipeline, the Roma to Brisbane pipeline, and the Queensland Gas pipeline intersect.
McArdle said the Wallumbilla Gas Supply Hub offers market participants more speed, flexibility and transparency to do business.
“In the past contract arrangements have been too cumbersome. Often by the time parties had agreed to a trade the opportunity had been lost,” he said.
The hub will allow traders to:
- buy and sell gas on standardised terms and conditions at specified delivery points,
- Trade spot and day-ahead products,
- Trade forward contracts for the first time,
It also provides the first ‘bulletin board capacity listing service’ for the east coast allowing participants and pipeline operators to transparently advertise their interest to buy and sell capacity on pipelines.
McArdle said commodity markets take time to develop, but the early signs are very encouraging.
“AEMO forecast the hub would trade 50 terajoules of gas by the end of the financial year and while the hub has only been operating for two weeks it has already traded 60 terajoules.”