Re Duke Eastern Gas Pipeline Pty Ltd

The case involves a review of a decision by the Minister that the Eastern Gas Pipeline (EGP) should be covered under the National Electricity Law Code (Code). The EGP is a significant pipeline that transports natural gas from the Gippsland Basin in Victoria to Sydney, New South Wales. The dispute revolves around whether the EGP should be subject to the Code, which would impose certain obligations on the pipeline operator to ensure fair access to the pipeline for third parties. The Tribunal was tasked with determining whether the coverage of the EGP under the Code would promote competition in the relevant gas markets and whether it would be uneconomic for anyone to develop another pipeline to provide the services offered by the EGP.

The key legal issues before the Tribunal were whether the coverage of the EGP under the Code would promote competition in the upstream and downstream gas markets, and whether it would be uneconomic for another pipeline to be developed to provide the services offered by the EGP. The Tribunal examined various factors, including the market power of the EGP, the demand for gas in the relevant markets, and the potential for other pipelines to provide similar services. The Tribunal also considered the forecasts of gas demand in New South Wales and the Australian Capital Territory, which indicated that the demand for Gippsland Basin gas would likely be within the range of 80-100 petajoules per annum by 2014.

The Tribunal concluded that covering the EGP under the Code would not promote competition in the upstream or downstream gas markets. The Tribunal found that the EGP did not have market power and that the existing voluntary access offered by Duke, the operator of the EGP, was sufficient to promote competition. Regarding the economic feasibility of developing another pipeline, the Tribunal found that the Interconnect, a potential substitute for the EGP, had entrenched cost disadvantages and that it would not be efficient for more than one pipeline to provide the services offered by the EGP. Based on these findings, the Tribunal decided that the EGP should not be covered under the Code.

The Tribunal's final orders were that the Minister's decision to cover the EGP under the Code be set aside, and that the EGP remain exempt from the provisions of the Code. This decision was based on the Tribunal's conclusion that covering the EGP would not promote competition in the relevant gas markets and that it would be uneconomic to develop another pipeline to provide the same services.