The Australian Competition and Consumer Commission has granted interim authorisation to the producers and marketers of the PNG Gas Project (the applicants).
The proposed $2.5 billion project is designed to take gas produced in Papua New Guinea and deliver it to Australia through a yet to be constructed pipeline from PNG to Gladstone in Queensland. This will create a major new source of natural gas into eastern Australia and promises to bring substantial public benefits to both Australia and PNG.
The interim authorisation is restricted to allow the applicants to discuss and agree amongst themselves the terms on which they would be willing to supply gas to potential customers in Australia. It also allows the applicants to negotiate with potential customers as to the terms on which they would be prepared to supply and purchase gas.
Interim authorisation will facilitate progression to the next stage in assessing the viability of the project. While allowing the applicants to negotiate with customers, this interim authorisation does not extend to any supply contracts.
The applicants intend to submit a detailed submission in support of their application for authorisation in the near future. The ACCC will then undertake comprehensive public consultation to fully assess the public benefits and anti-competitive detriments of the proposed arrangements.
In granting this interim authorisation, the ACCC acknowledges the substantial public benefits that this project can bring to Australia, and notes that should the ACCC deny authorisation after proper consideration of the detailed submission and issues arising from the public consultation process, any arrangements which were authorised may then be in breach of the Trade Practices Act 1974 and hence be unenforceable.
