Monday 19th Mar, 2018

ACCC allows NT and WA LNG producers to co-ordinate maintenance operations

Photo: ACCC chairman Rod Sims. Photo: ACCC
Photo: ACCC chairman Rod Sims. Photo: ACCC

AUSTRALIA’S competition watchdog has given the green light to LNG giants Chevron, INPEX, Shell and Woodside to co-ordinate maintenance activities in Western Australia and the Northern Territory.

The four LNG producers compete for a limited pool of skilled contractors and specialised equipment to conduct scheduled maintenance.

Australian Competition and Consumer Commission chairman Rod Sims said the LNG producers could now schedule maintenance together without risking breaching competition laws, reducing concurrent work at their facilities, improving efficiency and maximising production.

“If producers become aware of each other’s LNG facility shutdowns as part of this agreement, this information might give them an advantage in gas trading markets,” Mr Sims said.

To address this, the ACCC has imposed a condition of authorisation requiring the producers to publicly disclose maintenance schedule information that they share with each other.

A similar condition applies under an authorisation granted to LNG producers in Queensland in 2016.

“Information is a crucial component for creating efficient, well-functioning markets. Market-sensitive information disclosed to competitors as part of this process should be available to all participants,” Mr Sims said.

Authorisation is granted for five years, rather than the 10-year period sought by the LNG producers.

“With the evolving nature of the gas markets, there is significant uncertainty about the impact of the proposed conduct on related markets,” Mr Sims said.

“If the parties wish to seek reauthorisation in 2023, the ACCC will test whether the expected benefits and detriments have arisen and to assess the effectiveness of the condition.”

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