Gas Quality

Recent Developments

Gas Quality and Safety Workshops were held in early September 2013 in Wellington and Auckland to discuss a Gas Retailer Compliance Protocol developed by a steering group of gas retailers. The Protocol identifies information that will assist gas retailers to comply with the Gas (Safety and Measurement) Regulations 2010 and Gas (Downstream Reconciliation) Rules 2008, and to assist anyone who seeks assurance that the Regulations and/or the Rules are being complied with.

Workshop participants seemed to support the idea that the Protocol could reflect an industry view of the baseline standard of information provision that was necessary to support compliance with the Regulations; ie it would be 'Information Exchange Protocol' rather than a 'compliance' document. The current Protocol addresses the matters in the Regulations - Odorisation, Measurement, Gas Quality and Pressure. Workshop participants noted that these have quite different drivers, and that this might be important when it comes to getting buy-in to the document.

We have previously reviewed arrangements for the management of gas quality and published and consulted on an Issues Paper, and an Investigation Update paper. That work identified concerns that the arrangements for managing gas quality are complex and obscure. This is because gas quality is managed according to largely confidential provisions in a mesh of bilateral contracts.

Outline

A wide range of industry participants have a role in ensuring that gas users are supplied from the 'common pool' of transmission and distribution pipelines with gas that is fit for purpose. Along the physical gas supply chain, producers must control the quality of gas they inject into pipelines, and transmission and distribution system operators must ensure that operation of their systems does not adversely affect the quality of gas that is delivered from their pipelines. Also, the Gas (Safety and Measurement) Regulations 2010, now clarify the obligations of industry participants, including gas wholesalers and retailers, to only supply gas that is suitable and safe to use.

Although there are a number of agencies with a legislative mandate in relation to gas quality and gas pipelines, Gas Industry Co has a particular responsibility to ensure that industry arrangements provide for gas quality in a manner that facilitates the safe, efficient, and reliable delivery of gas; and provide for risks relating to security of supply to be properly and efficiently managed by those parties best able to manage such risks.

In Gas Industry Co's view, the small possibility that a gas quality incident could cause serious economic and reputational harm, coupled with 'common pool' features of gas pipelines, puts a particularly heavy onus on the industry to demonstrate that it is meeting its gas quality obligations. We consider that a unified industry response to this challenge will help to promote confident and efficient gas markets.

Consultation

Previously Consulted On

Gas Governance Issues in Quality: Investigation Update

Date Published: 01 August 2012

Gas Industry Co's earlier Gas Quality work identified concerns that the arrangements for managing gas quality are complex and obscure. We concluded that further investigation of contractual and operational arrangements was required. In this Investigation Update paper we present the results of our investigation, and identify some opportunities for safety and reliability improvements to promote more confident and efficient gas markets. In particular, we propose that industry participants support the development of a Gas Information Exchange Protocol currently being proposed by gas retailers.

Submissions on the Investigation Update paper closed on Friday 31 August 2012

Submissions received

Gas Quality Issues Paper

Date Published: 07 September 2010

The purpose of the Gas Governance Issues in Gas Quality: Issues Paper is to review New Zealand's arrangements for managing gas quality, identify areas for more detailed evaluation, and suggest next steps.

The paper has been written in response to industry concerns about the responsibility and liability for gas quality in New Zealand. Some participants believe responsibilities are unclear, or not well aligned with liabilities. This has been a point of contention between producers, transmission companies, distributors, and retailers.

To view the Gas Quality Issues paper, click below

Gas Quality Issues Paper

Analysis of Submissions

We have considered submissions and have repsonded in an Analysis of Submissions paper. The paper identifies further work Gas Industry Co will undertake in relation to gas quality arrangements.

Gas Governance Issues in Quality: Issues Paper- Analysis of Submissions

Advice to Minister

In December 2010 Gas industry Co advised the Minister on its work related to gas quality. The advice can be found below.

Advice to the Minister on Gas Quality Arrangements.

Submissions received