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Background

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 a number of legislative and contractual arrangements that relate to gas quality. A number of agencies also have regulatory powers in relation to gas quality. Gas Industry Co has a responsibility when recommending gas governance arrangements under the Gas Act to ensure that those arrangements provide for gas quality in a manner that facilitates the safe, efficient, and reliable delivery of gas.

Gas Industry Co 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.'

Recent Developments 

Since Gas Industry Co consulted on its Investigation Update paper in 2012, there have been several industry initiatives in relation to gas quality. A group of wholesalers and retailers initially worked to develop a 'Gas Information Exchange Protocol' aimed at giving them added confidence that service providers in the physical supply chain are meeting their obligations.

The document originated from the work of gas retailers wishing to ensure that they comply with the Safety Regulations. However, it became clear that the proposed Protocol had broader relevance and would require input from all participants in the gas supply chain to show the complete picture of how gas quality is managed. Gas Industry Co worked with industry stakeholders to develop a draft Protocol. That subsequently evolved into the Gas Quality R&P document. This document is published here

Future work

MDL is leading work on a number of areas evaluating opportunities for improvements in gas quality. The document below describes the facets of that work under the categories of control, reporting, and monitoring.

MDL – Possible Opportunities for Improvements in Gas Quality

Once that industry initiative has had time to achieve results, Gas Industry Co will reassess whether its regulatory objective in relation to gas quality has been met:

“To ensure industry arrangements include reasonable terms and conditions regarding gas quality that: allow for the safe, efficient, and reliable delivery of gas; and provide for risks to be properly and efficiently managed by those parties best able to manage such risks.”

Page last saved: September 06, 2016
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P 04 472 1800
A Gas Industry Co
Level 8, The Todd Building
95 Customhouse Quay
PO Box 10-646
Wellington 6143

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