Wholesale Market


Status: Completed


The current Government Policy Statement on Gas Governance seeks for the gas industry 'efficient arrangements for the short-term trading of gas.' Gas Industry Co has been addressing this provision through the development of protocols and standards applying to wholesale gas trading, including quality standards, balancing and reconciliation.

Summary of Status

A significant milestone towards the establishment of a wholesale gas trading mechanism was achieved in 2013 with the establishment of two private wholesale gas market trading platforms.

These initiatives were developed by emTrade (operated by Transpower) and the New Zealand Gas Market (operated by NZX). The platforms are in their early stages of operation but have the potential to fulfil the Government's policy objectives for wholesale gas trading.

The development of these trading platforms supplements the existing bilateral contracts market, which has existed since the industry's inception in the 1970s. Previous attempts to achieve the creation of a more public and transparent wholesale market include the trial of a short-term trading market by Gas Industry Co of the New Zealand Gas Exchange (NZGE) in June 2010. However, there was insufficient interest in the NZGE from market participants and the initiative was discontinued in December 2010. Further details about this initiative can be found in the Background Tab.

As part of its ongoing attention to wholesale market developments, Gas Industry Co commissioned a paper, Essentials of Efficient Natural Gas Trading in New Zealand, from United States-based energy trader Beverly Beaty, that provides an overview of how gas markets operate and outlines the features of the two industry-led initiatives. It is intended to assist any parties who would like to be more active gas trading, but who lack experience with trading on a centralised platform.

Contact Details

Ian Dempster
Tel: 04 494 2467


There are no new consultations. Between 2006 and 2010, Gas Industry Co consulted with the industry on options for a wholesale market. Documents relevant to this are set out below.

Previous correspondence with the Minister of Energy

Letter regarding the Gas Wholesale Market Discontinuation - December 2010

Letter from Minister regarding Gas Wholesale Market Design - December 2007

Recommendation on Wholesale Market Development - August 2007

Report on Wholesale Market Work Stream - December 2006

Previously Consulted On

Discussion Paper - Gas Wholesale Market Design

Date Published: 18 December 2006

Following receipt of submissions on its September discussion paper on Wholesale Market Design, Gas Industry Co has issued a further discussion paper which reports on the analysis of the submissions, provides Gas Industry Co's view on the issues raised and requests further input on a specific range of matters. This work stream is now focused on advancing the preparation of a standard gas sales agreement for shorter-term trades and investigating the feasibility of a matching platform as a basis for low-cost, electronic trading. Each of these initiatives is aimed at increasing transactional efficiency in gas trading.

Submissions received

Discussion Paper - Wholesale Market Design

Date Published: 25 September 2006

This discussion paper builds on the feedback received from stakeholders earlier in the year (2006). Gas Industry Co has undertaken both quantitative and qualitative analyses of options for development of a wholesale market and this discussion paper recommends a modular approach to implementation. In the first instance, it is proposed to issue a standard gas trading agreement as a means to achieving common standards for gas trading and to reduce transaction costs for market participants. The paper also recommends that a simple matching platform could be put in place for modest cost and would be expected to achieve additional transactional efficiencies. Gas Industry Co will take into account feedback received on the paper when undertaking the detailed design of wholesale market arrangements.

Submissions received

Discussion Paper - Concept Design for Wholesale Gas Market

Date Published: 27 March 2006

This discussion paper gives stakeholders the opportunity to review and comment on options for a wholesale gas market in New Zealand. A series of options are described at a conceptual level and evaluated according to criteria agreed between Gas Industry Co and the Wholesale Market Working Group. Submissions on this document will be used to assist in selecting an option for further development. The supplementary note addresses Section 41 of the Crown Minerals Act 1991, which may or may not have an effect on the design of the wholesale market.

Submissions received

Wholesale Market


Hub Options Presentation

These presentation slides provide a status report on the development of the wholesale market with particular focus on the options and motivation for locating trading at a hub. Two options were proposed: a virtual hub and a trading hub. The advantages, disadvantages and operational aspects of each option are explored and the conclusion is drawn that the trading hub option provides the best long-term solution.

Wholesale Market - Hub Options Presentation - 26 February 2008

Gas Market Design Presentation

These presentation slides give an introduction to the policy framework and conceptual issues for a wholesale gas market. It looks at the size, structure and characteristics of the New Zealand gas market in relation to other international markets and presents some high-level options available for the operation and governance of a trading market.

Wholesale Market Presentation - 1 December 2005

Market Administration

Trading System Operator

Wholesale Market Governance Documents

Standard Trading Contract

Trading System Operator

Service provider agreement

Gas Industry Co entered into a service provider agreement with M-co in 2008 for provision of a trading system. That agreement was novated to NZX in 2009 when NZX purchased the business assets of M-co.

The service provider agreement can be viewed here.

Wholesale Market governance documents

There are four interlinked documents that govern the operation of the New Zealand Gas Exchange:

Participant Undertaking

Rules of the New Zealand Gas Exchange

Participant Variance Agreement

Standard Trading Terms

Related Documents:

  • Determinations Document This document contains various parameters governing the operation of the New Zealand Gas Exchange (as required by the Rules) and the process by which participants will be cashed-out for any imbalances they create at the Trading Hub (as required by the Participant Variance Agreement).
  • Guidelines on Adjusting Net TQ This document sets out principles by which Gas Industry Co will calculate Net Traded Quantities and cash-outs in the event of a curtailment at the Trading Hub, as required by the Participant Variance Agreement.
  • How to Trade on the New Zealand Gas Exchange This document is a users' guide to the New Zealand Gas Exchange and includes references to the relevant trading rules.

Application Process

Entities wishing to join the market must apply using the form below and must supply all requested information.

Applicants will be notified upon receipt of their application. If more information is required, it will be requested within 5 business days of the receipt notification. Gas Industry Co will make a decision on applications within 10 business days of the receipt of all necessary information.
If an application is accepted, Gas Industry Co will:
  • Determine the effective date of admission (which, under the Rules, will be not less than 5 days from the date of notice);
  • Advise the Trading System Operator, so that an account for the applicant can be created; and
  • Request MDL to include the Trading Hub Delivery and Receipt points in the applicant's Transmission Services Agreement.
If an application is declined, Gas Industry Co will give reasons for its decision. Applicants may re-apply for admission to the NZGE by submitting an application that addresses the reasons for the first application to be declined.

Ministerial Consent

For trades where s41 of the Crown Minerals Act 1991 applies, an application form for Minister's consent can be viewed here on the
Ministry of Economic Development website.

Standard Trading Contract

Following extensive consultation with gas industry participants, it was suggested that Gas Industry Co take a staged approach to development of a wholesale gas trading market, the first step being to develop a standard gas sale contract for use in short term, direct-bilateral trades.

Gas Industry Co, in conjunction with industry participants, has developed a standard gas sales contract which is available free of charge for use by industry participants. Please click on the following links to view the GSA and Standard Terms:

Gas Supply Agreement

Standard Terms

The standard contract comes in two parts:

  • A Gas Supply Agreement in which the parties specify the variable terms of trade; and
  • A schedule of the standard, non-variable terms of trade.

As the standard contract is designed for trading on both the Maui and Vector systems, arrangements for the transportation of gas are dealt with outside of the standard contract. The standard contract provides for the non-exclusive trading of gas and therefore does not contain any restrictions on the on-sale of gas to third parties.

Gas Industry Co has developed a basic user guide to assist with use of the standard contract. Please click on the following link to view the user guide:

User Guide