On 5 November 2009, the ACCC authorised the joint marketing of natural gas from the Gorgon Gas Project (Gorgon Project). This followed its draft decision to do so earlier this year (as reported in the September edition of the Competition & Market Regulation Update).2

ACCC authorisation provides immunity in respect of conduct that might otherwise raise concerns under the competition provisions of the TPA. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

The Gorgon Project is a large liquefied natural gas (LNG) and domestic gas development off the north west coast of Australia involving joint venturers including Chevron Australia, Mobil Australia and Shell. It is forecast to commence domestic gas production in the second half of 2015 and is regarded as the largest project of its kind in Australian history.

The ACCC has authorised the joint venture partners, until 31 December 2015, to:

  • jointly discuss and negotiate the terms and conditions (including price) on which they offer the natural gas produced for sale to customers in Western Australia (domgas)
  • make and give effect to agreements containing common terms and conditions, (including price and price arbitrations/determinations) for the sale of domgas, and
  • continue to give effect to the provisions of domgas sales agreements entered during the period of authorisation for up to 25 years from the first gas from the project.

The authorisation is conditional on ‘ring fencing’ arrangements that are designed to prevent commercially sensitive information that will be obtained by the Gorgon joint venture from being transferred to competing gas producing projects