AER publishes draft decision to grant ring-fencing exemptions to Jemena Pipeline Businesses

The AER has today published a draft decision to grant exemptions to Jemena Pipeline Businesses from ring-fencing obligations under section 140 of the National Gas Law (NGL).

Jemena submitted 10 individual applications on behalf of separate Jemena pipeline entities exempting from obligations under section 140 of the NGL that prohibit the sharing of marketing staff between service providers and related businesses.

This exemption provides in effect that:

• Jemena Pipeline Businesses’ marketing staff may be employees, agents or contractors of the related business of the Phillip Creek Compressor Station (PCCS); and
• Jemena Pipeline Businesses’ employees, agents or contractors may be marketing staff of PCCS.

The AER considers that, in the current circumstances, the cost savings resulting from the exemption outweigh any potential benefits of complying with the ring-fencing obligations. 

Jemena is required under the National Gas Rules to notify the AER, without delay, if it no longer qualifies for the exemption.

Have your say

We invite stakeholders to provide written submissions by 6 February 2025.  Submissions and requests to make a submission via alternative methods should be emailed to AERringfencingaer [dot] gov [dot] au (AERringfencing[at]aer[dot]gov[dot]au). 

We prefer to make written submissions publicly available, to facilitate an informed and transparent consultative process. We will treat written submissions as public documents unless otherwise requested.

Background

Gas ring-fencing laws were extended under the March 2023 gas reforms to include non-scheme pipelines. Service providers of these pipelines are required to comply with the new laws from 2 March 2024. 

The ring-fencing framework set out in Part 2 of Chapter 4 of the National Gas Law provides for the specific obligations applicable to gas pipeline service providers. The provisions ensure that related businesses do not gain a competitive advantage by virtue of their common ownership or operation with pipelines.

Service providers may apply to the AER for an exemption from the ring-fencing provisions under rule 34 of the National Gas Rules. 

Learn more about ring-fencing

The AER has published a Compliance bulletin – new obligations on gas pipeline, compression and storage service providers and a Gas ring-fencing decision guide.