Gas Quality

Overview

Gas users require a safe, reliable, fit-for-purpose product. Gas Industry Co's Gas Quality work aims to ensure that industry arrangements will meet that need and so promote a confident and efficient gas market.

Gas 'quality' has three main aspects:

  • its chemical make-up - the 'gas specification';
  • its detectability - the addition of odorant to ensure that leaks are easily detected; and
  • its delivery pressure - so that it is safe for the intended use.

Gas is transported from gas treatment facilities, through the 'common pool' of transmission and distribution pipelines, to each end user's gas metering facility. Gas quality is controlled by parties in that physical supply chain. However, gas wholesalers and retailers also have legal responsibilities for the quality of gas they sell.

There are many legislative and contractual arrangements that relate to gas quality and a number of agencies with regulatory powers in relation to gas quality. Gas Industry Co has a particular responsibility under the Gas Act to ensure that industry arrangements provide for gas quality in a manner that facilitates the safe, efficient, and reliable delivery of gas.

Gas industry has investigated gas quality issues and consulted on those. In our August 2012 Investigation Update, we concluded that we had:

'…no reason to doubt that that gas quality is being managed by parties in the physical supply chain in a rigorous and professional manner. However, we believe that 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 ensure a high degree of transparency. Also, the introduction of the Gas (Safety and Measurement) Regulations 2010 (Safety Regulations) has clarified the responsibility gas wholesalers and retailers have for gas quality. Demonstrating compliance with this responsibility will also require greater transparency.'

Since then industry participants have been discussing how best to demonstrate that they meet their various regulatory and contractual obligations. In particular a group of wholesalers and retailers proposed introducing a 'Gas Information Exchange Protocol' to give them added confidence that service providers in the physical supply chain were meeting their obligations. From these discussions a view has emerged that the document might be more usefully designed as a pan-industry resource aimed at giving stakeholders an understanding of how gas quality is managed and of the availability of information about gas quality.

Further details of Gas Industry Co's investigations and consultation on gas quality issues can be viewed under the consultation tab.

Recent Developements

Workshops were held in September 2013 to discuss the merits of the 'Gas Information Exchange Protocol' proposed by a group of gas wholesalers and retailers. Having considered stakeholder feedback obtained during and after those workshops, the group has been working with Gas Industry Co to reposition the protocol as a pan-industry resource aimed at giving stakeholders an understanding of how gas quality is managed and of the availability of information about gas quality.

Following informal drafting sessions with the parties most closely involved, we expect that further workshops will be held on the protocol before the end of the year.

Investigation and Consultation on Gas Quality Issues

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