Gas Supply (Gas Quality Specifications) Act 2009 (Western Australia)

Mechanically, the Gas Supply (Gas Quality Specifications) Act 2009 (WA) creates a statutory framework that permits gas of a quality that does not meet an existing pipeline reference specification to be supplied into specified gas transmission pipelines (PIA pipelines), subject to a set of preconditions and process controls. The Act does this by (a) authorising the Minister to declare PIA pipelines (s 5); (b) requiring gas producers to enter pipeline impact agreements (PIAs) with pipeline operators before supplying non‑reference quality gas into a PIA pipeline (s 6(1)); (c) specifying minimum content requirements for PIAs (s 7); (d) prescribing procedural default rules, dispute resolution processes and expert determinations by regulations (ss 8-9); (e) enabling pipeline operators to reduce flow or allocation where the gas producer fails to comply (s 6(3)) and to seek injunctions in the Supreme Court (s 12); (f) permitting the regulation‑making power to modify gas contracts and access arrangements to give effect to the scheme (s 14); and (g) creating parallel compensation and rectification schemes administered by regulation and by the Director of Energy Safety and Economic Regulation Authority, funded by contributions from gas producers (Parts 4 and 5, especially ss 16, 23, 24, 28).

The Act states its primary purposes for Part 2 as enabling a gas producer to supply non‑reference quality gas into a PIA pipeline, while ensuring the producer cannot do so until relevant effects on pipeline capacity, operations and maintenance have been addressed in a way that neither materially advantages nor materially disadvantages pipeline operators, and that users are not materially disadvantaged by the resolution process (s 4). Parts 3-6 provide the regulatory scaffolding: standard specifications may be prescribed (s 13); regulations may modify existing and future gas contracts so that specified contracts operate against a statutory gas quality specification rather than their contractual terms (s 14); compensation schemes for affected consumers, Part 4 pipeline operators and gas storage operators may be prescribed by regulation (ss 16-18); and a rectification programme for small consumer installations is established, funded by an Account to which gas producers contribute (ss 21-29).

CrestWestern Australia

Gas Supply (Gas Quality Specifications) Act 2009

Western Australia

Gas Supply (Gas Quality Specifications) Act 2009

Contents

Part 1 — Preliminary

Short title 2
Commencement 2
Terms used 2

Part 2 — Gas quality and capacity of PIA pipelines

Purposes of this Part 7
PIA pipelines 7
Controlling the quality of gas flowing into PIA pipelines 8
Content of pipeline impact agreements 9
Formation of pipeline impact agreements 11
Pipeline impact agreements — dispute resolution 12
Short‑term situations 13
Compensation for adverse effects on certain pipeline users 14
Injunctions 14

Part 3 — Modifying gas contracts

Standard gas quality specifications for pipelines 17
Modifying gas contracts 17

Part 4 — Compensation for certain gas consumers and operators of gas transmission pipelines and gas storage facilities

Terms used 19
Regulations may provide for compensation scheme 19
Compensation scheme for certain gas consumers 20
Compensation scheme for operators of Part 4 pipelines and operators of gas storage facilities 22
Double compensation 23
Part 4 pipeline becoming PIA pipeline 24

Part 5 — Rectifying consumer installations

Division 1 — Preliminary

Purposes of this Part 25
Terms used 25

Division 2 — Rectification programme

Director to establish and implement the rectification programme 27
Payments into and out of the Account 28
Surplus funds to be repaid to gas producers upon completion of the rectification programme 28
Application of Financial Management Act 2006 and Auditor General Act 2006 29
Annual report of Department to include information about the rectification programme 29

Division 3 — Reimbursement scheme

Regulations may provide for reimbursement scheme 30
Minister may determine beginning of the reimbursement period 31

Part 6 — General provisions

Relationship to Gas Access Laws 32
Coordinator to monitor and inquire into 32
Exemptions may be granted by Minister 32
Review of Act 33
Regulations 33

Part 7 — Acts amended

Division 1 — Energy Coordination Act 1994 amended

Act amended 37
Section 26 amended 37

Division 2 — Gas Pipelines Access (Western Australia) Act 1998 amended

Act amended 37
Section 73 amended 37

Notes

Compilation table 38

Uncommenced provisions table 38

Defined terms

Western Australia

Gas Supply (Gas Quality Specifications) Act 2009

An Act to provide for —

the supply of gas that does not meet certain gas quality specifications; and
the control of the quality of such gas and its impact on gas transmission pipelines; and
the payment of compensation to certain gas consumers, operators of gas transmission pipelines and operators of gas storage facilities who are adversely affected by receiving such gas; and
a programme to modify or replace certain gas appliances and installations that might be rendered unsafe by the supply of such gas, in preparation for its supply; and
the operation of an account for contributions by gas producers to the costs of the programme,

and for related purposes.

The Parliament of Western Australia enacts as follows:

Part 1 — Preliminary

1. Short title

This is the Gas Supply (Gas Quality Specifications) Act 2009.

2. Commencement

This Act comes into operation as follows —

(a) Part 1 — on the day on which this Act receives the Royal Assent;

(b) the rest of the Act — on a day fixed by proclamation, and different days may be fixed for different provisions.

3. Terms used

(1) In this Act, unless the contrary intention appears —

access determination means a decision or determination, made under a Gas Access Law, on access to a pipeline service provided by means of a pipeline, that has not been reflected in or replaced by a contract for the pipeline service;

Coordinator means the Coordinator of Energy referred to in the Energy Coordination Act 1994 section 4;

exempt contract —

(a) means a contract in respect of which a declaration under the Gas Corporation Act 1994 Schedule 5 clause 6 was in force immediately before the coming into operation of the Dampier to Bunbury Pipeline Act 1997 Schedule 4 clause 17(4); and

(b) includes a contract entered into —

(i) in substitution for a contract referred to in paragraph (a) or any provision of such a contract; or

(ii) by way of amendment of a contract referred to in paragraph (a) or subparagraph (i);

Gas Access Law means —

(a) the National Gas Access (Western Australia) Law, the Rules made under that Law and the regulations made under the National Gas Access (WA) Act 2009; or

(b) the Gas Pipelines Access (Western Australia) Law, and the regulations, in force under the Gas Pipelines Access (Western Australia) Act 1998 before the commencement of the National Gas Access (WA) Act 2009 section30;

gas consumer means a person who —

(a) receives gas that has been transported through a gas transmission pipeline; and

(b) in the previous 12 months, consumed, at any one site, at least one terajoule of gas that had been transported through a gas transmission pipeline;

gas distribution system means a distribution system as defined in the Energy Coordination Act 1994 section 3(1);

gas producer means a person who supplies, or proposes to supply, gas that will flow into a gas transmission pipeline and who is —

(a) the registered holder of a petroleum production licence under the Petroleum and Geothermal Energy Resources Act 1967; or

(b) the registered holder of a production licence for petroleum under the Petroleum (Submerged Lands) Act 1982 Part III; or

(c) the registered holder of a petroleum production licence under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Commonwealth); or

(d) prescribed for the purposes of this definition,

but does not include —

(e) a person in the person’s capacity as an operator of a gas storage facility; or

(f) a person declared not to be a gas producer by regulations made for the purposes of this definition;

gas storage facility means a gas storage facility, with a storage capacity of more than 50 terajoules, prescribed for the purposes of this definition;

gas transmission pipeline means a pipeline as defined in the Petroleum Pipelines Act 1969 section 4 and includes a pipeline (as defined for the purposes of this definition) declared to be a gas transmission pipeline by regulations made for the purposes of this definition but does not include a pipeline (as defined for the purposes of this definition) declared not to be a gas transmission pipeline by regulations made for the purposes of this definition;

inlet point, on a gas transmission pipeline, means —

(a) a point on the pipeline at which gas flows into the pipeline; or

(b) a number of such points that are adjacent to each other and that are declared to be a single point by regulations made for the purposes of this definition;

operator, of a gas transmission pipeline, means a person who is the registered holder of a licence in respect of the pipeline, under the Petroleum Pipelines Act 1969 and includes a person (who owns or operates the pipeline) prescribed for the purposes of this definition;

PIA pipeline has the meaning given in section 5;

pipeline, for the purposes of the definition of gas transmission pipeline, means a pipeline as defined in the Petroleum Pipelines Act 1969 section 4 as if all of the definition from and including “but does not include” were deleted;

pipeline impact agreement has the meaning given in section 6(1)(a);

pipeline service has the meaning given in the National Gas Access (Western Australia) Law section 2;

pipeline services agreement, in relation to a gas transmission pipeline, means —

(a) a contract for a pipeline service provided by means of the pipeline; or

(b) an access determination in relation to the pipeline;

reference specification, for a gas transmission pipeline, means the gas quality specification prescribed for the pipeline for the purposes of this definition;

relevant effects, on the capacity, operations and maintenance of a PIA pipeline, has the meaning given in section 7(2);

site, in the definition of gas consumer, means a place, other than a place that is or is part of a gas transmission pipeline or a gas storage facility, where a person consumes gas delivered to the person through an outlet point on a gas transmission pipeline or gas distribution system;

specified, in relation to an instrument made under this Act, means specified in that instrument;

standard specification, for a gas transmission pipeline, means the gas quality specification specified for the pipeline under section 13;

user, of a gas transmission pipeline, means a person provided a pipeline service by means of the pipeline under a pipeline services agreement to which the person is a party.

(2) Before a reference specification or a standard specification for a gas transmission pipeline is amended, the Minister must consult with —

(a) the operator of the pipeline; and

(b) any other person to the extent to which the Minister considers necessary in relation to the proposed amendment.

(3) A regulation to amend a reference specification or a standard specification for a gas transmission pipeline cannot be expressed to come into effect until after the period during which it is subject to disallowance under the Interpretation Act 1984 section 42.

Part 2 — Gas quality and capacity of PIA pipelines

4. Purposes of this Part

The primary purposes of this Part are to ensure that —

(a) a gas producer can supply gas, that will flow into a PIA pipeline, of a quality that does not comply with the reference specification for the pipeline; and

(b) the gas producer cannot do so until the relevant effects of such supply on the capacity, operations and maintenance of the PIA pipelines have been dealt with in a way that neither materially advantages nor materially disadvantages the operators of the pipelines; and

(c) users of PIA pipelines are not materially disadvantaged by the way in which those effects are determined and dealt with.

5. PIA pipelines

(1) A PIA pipeline is a gas transmission pipeline or a part of a gas transmission pipeline declared by the Minister to be a PIA pipeline.

(2) The Minister must not make, amend or revoke a declaration other than in accordance with the criteria and procedure provided for by the regulations.

(3) In this Act, a reference to a gas transmission pipeline includes a reference to a part of a gas transmission pipeline when the context requires.

6. Controlling the quality of gas flowing into PIA pipelines

(1) A gas producer must not supply gas that will flow into a PIA pipeline if the gas is of a quality that does not comply with the reference specification for the pipeline unless —

(a) the gas producer and the operator of the pipeline are parties to an agreement (a pipeline impact agreement) in respect of the supply, that complies with the minimum requirements set out in section 7 in relation to the supply; and

(b) the gas complies with the gas quality specification set out in the pipeline impact agreement in relation to the supply; and

(c) the quantity of gas supplied does not exceed the maximum quantity set out in the pipeline impact agreement in relation to the supply; and

(d) regulations, under section 14(2)(a), modifying contracts that relate to gas transported through the pipeline have come into effect.

(2) A pipeline impact agreement that is entered into, or an amendment of a pipeline impact agreement, does not have effect for the purposes of subsection (1)(b) and (c) for the 18 months immediately following the entering into of the agreement or the amendment.

(3) If a gas producer supplies gas that will flow into a PIA pipeline at an inlet point and the gas producer fails to comply with subsection (1), the operator of the pipeline may —

(a) reduce the flow (including to zero) in accordance with the regulations; and

(b) whether or not the flow of gas is reduced under paragraph (a) — reduce the allocation (including to zero) of gas flowing into the pipeline at the inlet point to users of the pipeline, in accordance with the regulations.

(4) The operator of a PIA pipeline may, under section 12, apply to the Supreme Court for an injunction against a gas producer who has engaged, is engaging or is proposing to engage in conduct that constitutes a failure to comply with subsection (1).

(5) The operator of a PIA pipeline may take an action under subsection (3) or (4), or both, despite any relevant pipeline services agreement.

(6) Subsections (3) and (4) are in addition to any other rights a person may have in relation to a failure to comply with subsection (1).

(7) The Minister may, in a particular case, allow a shorter period for the purposes of subsection (2) if satisfied that allowing a shorter period will not adversely affect, in a material way, operators of PIA pipelines, operators of other gas transmission pipelines, operators of gas storage facilities, operators of gas distribution systems or gas consumers.

(8) The Criminal Code section 177 does not apply to the obligation in subsection (1).

7. Content of pipeline impact agreements

(1) For the purposes of section 6(1)(a), the minimum requirements in relation to a supply of gas are that the pipeline impact agreement —

(a) identifies the inlet point on the PIA pipeline into which the gas will flow; and

(b) sets out the gas quality specification with which the gas must comply; and

(d) sets out the day on which it is proposed to commence supplying the gas or change the quality or quantity of gas to be supplied; and

(e) sets out the relevant effects on the capacity, operations and maintenance of the PIA pipeline of the gas flowing into the pipeline, and the way that those effects are to be dealt with; and

(f) sets out the duration of the agreement; and

(g) sets out any other prescribed matters; and

(h) complies with any prescribed requirements as to the form in which the matters to be set out in the agreement are to be expressed or otherwise presented.

(2) For the purposes of this Act, the relevant effects on the capacity, operations and maintenance of a PIA pipeline, of gas (that does not comply with the reference specification for the pipeline) flowing into the pipeline, are —

(a) the reduction in the pipeline’s capacity; and

(b) the effects on the pipeline’s operations and maintenance,

attributable to the gas not being of a quality that complies with the reference specification for the pipeline.

(3) The regulations may provide for the method by which, and the assumptions upon which —

(a) a change in the capacity of a PIA pipeline is to be worked out; and

(b) the effects on the pipeline’s operations and maintenance are to be worked out, including by limiting which effects are to be considered as effects for the purposes of subsection (2).

(4) An agreement of the nature of a pipeline impact agreement, that was entered into after 1 January 2009 and before the commencement of this Part, in respect of a supply of gas that will flow into a PIA pipeline, is to be taken to comply with the minimum requirements set out in this section if it substantially complies with the requirements of subsection (1)(a), (b), (c), (d), (e) and (f) in relation to the supply.

8. Formation of pipeline impact agreements

(1) This section applies to the formation of a pipeline impact agreement in respect of the supply of gas that flows or that will flow into a PIA pipeline at an inlet point except to the extent to which the gas producer and the operator of the pipeline (the parties) agree otherwise.

(2) The default procedure provided for in the regulations applies to the formation of a pipeline impact agreement.

(3) If —

(a) the relevant effects on the capacity, operations and maintenance of the pipeline are not in dispute between the parties (which includes that those effects have been determined by an expert under section 9(2)(b)); and

(b) the gas producer proposes that those effects be dealt with by a method prescribed for the purposes of this paragraph,

the default pipeline impact agreement provided for by the regulations in relation to that method becomes the proposed pipeline impact agreement in relation to the supply of the gas.

(4) The proposed pipeline impact agreement referred to in subsection (3) becomes the pipeline impact agreement in respect of the supply of the gas, as if the parties had entered into the agreement, when all matters in the proposed pipeline impact agreement to be resolved by the parties are not in dispute as an access dispute under a Gas Access Law or under section 9.

(5) A dispute between the parties about a matter in the proposed pipeline impact agreement that is provided for by the default pipeline impact agreement cannot be dealt with as an access dispute under a Gas Access Law or under section 9.

(6) For the purposes of subsection (5), a matter is provided for by a default pipeline impact agreement if the matter is set out in the default agreement and the matter is not identified in the agreement as a matter that the parties may resolve.

(7) The regulations may adopt standard form agreements published by the Minister, in accordance with the regulations, for the purposes of this section.

(8) Subsection (7) does not limit section 34(4).

9. Pipeline impact agreements — dispute resolution

(1) The regulations may provide for and in relation to the resolution of —

(a) disputes between gas producers and operators of PIA pipelines relating to pipeline impact agreements and proposed pipeline impact agreements; and

(b) disputes relating to the reduction of the flow of gas, or the allocation of gas, under section 6(3).

(2) The regulations may do the following —

(a) provide for the resolution of those disputes by an arbitrator;

(b) provide for disputes about the relevant effects on the capacity, operations and maintenance of a PIA pipeline to be resolved by the determination of an expert chosen in accordance with the regulations and for such determinations to be final and binding on the parties to the dispute;

(3) If, in the resolution of a dispute, an expert or an arbitrator determines terms of a pipeline impact agreement or proposed pipeline impact agreement, those terms become part of the agreement or proposed agreement the subject of the dispute.

10. Short‑term situations

(1) The regulations may provide for and in relation to short‑term situations.

(2) A short‑term situation is a situation during which there is a disruption to the flow or quality of gas (whether planned or not) that means that —

(a) a gas producer cannot —

(i) continue to supply gas that will flow into a PIA pipeline; and

(ii) comply with section 6(1) in respect of that supply;

(b) a pipeline services agreement or gas supply agreement cannot be complied with.

(3) The regulations may do the following —

(a) set out modifications of the provisions of this Part that are to apply during short‑term situations;

(b) enable the Minister to issue directions in relation to a particular short‑term situation, modifying the application of the provisions of this Part, or regulations made for the purposes of section 14, during the short‑term situation.

(4) Regulations or directions making modifications for the purposes of this section must specify the period during which the modifications are to have effect, which cannot be for more than 7 days, or any longer period (not exceeding 3 months) allowed by the Minister.

(5) A direction issued by the Minister may specify a period, during which the modifications are to have effect, that begins at the beginning of the short‑term situation, whether or not that is earlier than the day on which the direction is issued.

(6) If the Minister allows a longer period under subsection (4), the Minister must cause reasons for allowing the longer period to be laid before each House of Parliament within 6 sitting days of the House.

11. Compensation for adverse effects on certain pipeline users

(1) The regulations may provide for and in relation to a scheme of compensation under which users of a PIA pipeline are entitled to compensation from parties to pipeline impact agreements in respect of the pipeline, for adverse effects on the users’ rights (under pipeline services agreements) resulting from the way in which the relevant effects on the capacity of the pipeline were or were not dealt with in the pipeline impact agreement.

(2) The regulations may do the following —

(a) provide for the resolution of disputes arising out of the compensation scheme, including by an arbitrator;

(b) provide for disputes about —

(i) the relevant effects on the capacity of a PIA pipeline; or

(ii) the effects on users’ rights (under pipeline services agreements) resulting from the way in which the relevant effects on the capacity of the pipeline were or were not dealt with in the pipeline impact agreement,

to be resolved by the determination of an expert chosen in accordance with the regulations and for such determinations to be final and binding on the parties to the dispute;

12. Injunctions

(1) If, on the application of the operator of a PIA pipeline, the Supreme Court is satisfied that a gas producer has engaged, is engaging or is proposing to engage in conduct that constitutes a failure to comply with section 6(1), the Court may grant an injunction, on such terms as the Court thinks appropriate —

(a) restraining the gas producer from engaging in the conduct; or

(b) if the conduct involves refusing or failing to do something — requiring the gas producer to do the thing.

(2) The Court may grant an injunction by consent of all of the parties to the proceedings, whether or not the Court is satisfied as to the matters in subsection (1).

(3) The Court may grant an interim injunction pending determination of an application under subsection (1).

(4) The power of the Court to grant an injunction restraining a gas producer from engaging in conduct may be exercised whether or not —

(a) it appears to the Court that the gas producer intends to engage again, or to continue to engage, in conduct of that kind; or

(b) the gas producer has previously engaged in conduct of that kind; or

(5) The power of the Court to grant an injunction requiring a gas producer to do a thing may be exercised whether or not —

(a) it appears to the Court that the gas producer intends to refuse or fail again, or to continue to refuse or fail, to do that thing; or

(b) the gas producer has previously refused or failed to do that thing; or

(c) there is an imminent danger of substantial damage to any person if the gas producer refuses or fails to do that thing.

(6) The Court may discharge or vary an injunction granted under this section.

Part 3 — Modifying gas contracts

13. Standard gas quality specifications for pipelines

The regulations may specify a gas quality specification for one or more gas transmission pipelines that is to be the standard specification for the pipeline or pipelines.

14. Modifying gas contracts

(1) In this section —

gas contract means a contract that relates to the sale, supply, storage, delivery, receipt or transportation of gas transported or to be transported through a gas transmission pipeline.

(2) The regulations may modify existing and future gas contracts for the purposes of this Act, including by doing the following —

(a) providing that the contracts have effect so that the gas to be sold, supplied, stored, transported, delivered or received under the contracts need only comply with a gas quality specification provided for in the regulations;

(b) providing that specified references to gas quality specifications in the contracts have effect as if they were references to a gas quality specification provided for in the regulations;

(i) of having been modified under paragraph (a) or (b); or

(ii) of the enactment and coming into operation of this Act or of any particular provision of this Act; or

(iii) of gas flowing into a gas transmission pipeline, being gas that does not comply with the reference specification for the pipeline.

(3) For the purposes of subsection (2)(a) and (b), the ways in which the regulations may provide for a gas quality specification include the adoption of a gas quality specification in, or worked out in accordance with, a pipeline impact agreement or gas contract.

(4) Regulations made for the purposes of subsection (2)(a) or (b) cannot, in relation to gas flowing, or that has flowed, out of a PIA pipeline, provide for a gas quality specification that is less stringent than the standard specification for the gas transmission pipeline.

(5) In dealing with the effects on a gas contract of a matter referred to in subsection (2)(c), the regulations may provide that the contract does or does not have a certain effect, including that the occurrence of the matter —

(a) is not to be considered as a breach of the contract; or

(b) does or does not modify existing rights, duties or liabilities, or give rise to additional rights, duties or liabilities, under the contract.

Part 4 — Compensation for certain gas consumers and operators of gas transmission pipelines and gas storage facilities

15. Terms used

In this Part —

downstream agreement means a contract under which gas, which has been transported through a gas transmission pipeline, is delivered to a gas consumer;

Part 4 pipeline means a gas transmission pipeline that is not a PIA pipeline;

plant and equipment costs, of a person, means the costs of rectifying or replacing plant and equipment to the extent necessary for the person to receive gas and continue the person’s operations as carried on before the gas was delivered;

relevant gas quality specification, for a gas consumer has the meaning given in section 17(2), for an operator of a Part 4 pipeline has the meaning given in section 18(2) and for an operator of a gas storage facility has the meaning given in section 18(3).

16. Regulations may provide for compensation scheme

(1) The regulations may provide for and in relation to a scheme of compensation under which a gas consumer, an operator of a Part 4 pipeline or an operator of a gas storage facility is entitled to compensation from gas producers for —

(a) the costs incurred by the consumer or operator as a result of being delivered gas that does not comply with the relevant gas quality specification for the consumer or operator; and

(b) the loss of capacity (in terajoules) of a gas storage facility resulting from the operator of the facility being delivered gas that does not comply with the relevant gas quality specification for the operator.

(2) The regulations may do the following —

(a) provide for the resolution of disputes arising out of the compensation scheme, including by an arbitrator;

(b) provide for specified disputes to be resolved by the determination of an expert chosen in accordance with the regulations and for such determinations to be final and binding on the parties to the dispute;

(3) The costs referred to in subsection (1)(a) are, under the regulations, to be limited to the direct costs incurred by the consumer or operator and may, under the regulations, be offset by the value of any benefit derived from being delivered the gas.

(4) The regulations may modify the application of this Part in relation to the exempt contract.

(5) A provision of this section, section 17 or section 18 that sets a limit on the compensation payable under the scheme does not mean that the regulations cannot further limit the compensation payable.

(6) A gas producer is not to be liable, under regulations made for the purposes of this Part, to provide compensation except in relation to supplying gas that does not comply with the reference specification for a gas transmission pipeline into which the gas flows.

17. Compensation scheme for certain gas consumers

(1) This section applies in respect of the compensation scheme as the scheme applies to gas consumers.

(2) The relevant gas quality specification for a gas consumer in relation to the delivery of gas to the consumer under a particular downstream agreement is the gas quality specification with which the gas to be delivered under the agreement must have complied, immediately before 1 January 2009.

(3) The costs referred to in section 16(1)(a), of a gas consumer, are, under the regulations, to be limited to —

(a) the costs necessary to restore any reduction in the capacity of the consumer’s operations resulting from being delivered the gas, to the extent to which the reduction in capacity is attributable to the gas not complying with the relevant gas quality specification for the consumer; and

(b) the plant and equipment costs of the gas consumer, to the extent to which those costs are attributable to the gas not complying with the relevant gas quality specification for the consumer; and

(c) increases in operating and maintenance costs of the gas consumer resulting from being delivered the gas, to the extent to which those increases are attributable to the gas not complying with the relevant gas quality specification for the consumer.

(4) A gas consumer is not to be entitled to compensation under the regulations in relation to the delivery of gas unless the consumer is entitled to the delivery of the gas under a downstream agreement that —

(a) was in force immediately before 1 January 2009; and

(b) is not an extension (by renegotiation, or exercise of an option to extend, on or after 1 January 2009) of such an agreement.

(5) A gas consumer is not to be entitled to compensation under the regulations in relation to gas delivered to the consumer after 1 January 2029.

18. Compensation scheme for operators of Part 4 pipelines and operators of gas storage facilities

(1) This section applies in respect of the compensation scheme as the scheme applies to operators of Part 4 pipelines and operators of gas storage facilities.

(2) The relevant gas quality specification for an operator of a Part 4 pipeline in relation to the pipeline is the reference specification for the pipeline.

(3) The relevant gas quality specification for an operator of a gas storage facility in relation to the facility is the gas quality specification prescribed for the facility for the purposes of this subsection.

(4) The costs referred to in section 16(1)(a), of an operator of a Part 4 pipeline or a gas storage facility, are, under the regulations, to be limited to —

(a) the costs necessary to restore any reduction in the capacity of the pipeline or gas storage facility resulting from being delivered the gas, to the extent to which the reduction in capacity is attributable to the gas not complying with the relevant gas quality specification for the operator; and

(b) the plant and equipment costs of the operator, to the extent to which those costs are attributable to the gas not complying with the relevant gas quality specification for the operator; and

(c) increases in operating and maintenance costs of the operator resulting from being delivered the gas, to the extent to which those increases are attributable to the gas not complying with the relevant gas quality specification for the operator.

19. Double compensation

(1) A contract or access determination (including a contract or access determination in force at the time that this section comes into operation) does not have effect to the extent to which it would otherwise provide compensation (whether or not expressly and whether in whole or in part) for —

(a) a relevant effect on a PIA pipeline’s capacity, operations or maintenance; or

(b) a cost incurred by a gas consumer, an operator of a Part 4 pipeline or an operator of a gas storage facility as a result of being delivered gas that does not comply with the relevant gas quality specification for the consumer or operator; or

(c) a loss of capacity of a gas storage facility resulting from the operator of the facility being delivered gas that does not comply with the relevant gas quality specification for the operator,

that is provided for under a pipeline impact agreement or this Part, or that, although there is a pipeline impact agreement in relation to the relevant effect referred to in paragraph (a), is not provided for under the agreement, but would ordinarily be provided for under such an agreement.

(2) Subsection (1) does not apply to a pipeline impact agreement or a contract entered into under or for the purposes of a pipeline impact agreement or this Part.

(3) Without limiting the ways in which a contract or an access determination could otherwise provide compensation it could do so by increasing a liability (including costs and tariffs) or reducing a benefit otherwise provided for by the contract.

(4) In this section, a reference to providing compensation for an effect, cost or loss referred to in subsection (1) includes a reference to effecting recovery for, and to dealing with, the effect, cost or loss.

20. Part 4 pipeline becoming PIA pipeline

The regulations may provide for and in relation to any matter arising as a consequence of a gas transmission pipeline ceasing to be a Part 4 pipeline and becoming a PIA pipeline, including by —

(a) providing for any necessary overlap between the application of this Part and Part 2; and

(b) modifying or extinguishing rights, duties or liabilities under this Part; and

(d) providing for the extension of the scheme of compensation under section 16 to the operator and users of the pipeline to cover any losses resulting from the loss of capacity (in terajoules) of the pipeline resulting from the operator of the pipeline being delivered gas that does not comply with the reference specification for the pipeline, prior to the loss of capacity being dealt with in accordance with a pipeline impact agreement.

Part 5 — Rectifying consumer installations

Division 1 — Preliminary

21. Purposes of this Part

The primary purposes of this Part are to provide for —

(a) a programme for the modification or replacement of certain consumer installations in preparation for the supply of lower heating value gas to consumers through gas distribution systems; and

(b) the operation of an account for the receipt of contributions from gas producers for the purposes of funding the programme; and

(c) a scheme of reimbursement under which the cost of the programme is apportioned between gas producers who supply lower heating value gas that flows into certain gas transmission pipelines during the reimbursement period.

22. Terms used

(1) In this Part —

Account means the account called the Gas Producers Contribution Account established as an agency special purpose account under the Financial Management Act 2006 section 16(1)(d);

Authority means the Economic Regulation Authority established by the Economic Regulation Authority Act 2003 section 4;

consumer means a person who —

(a) is a consumer under the Gas Standards Act 1972 section 4; and

(b) in the previous 12 months, did not consume, at any one site, more than 0.18 terajoules of gas;

consumer installation means a gas installation or gas appliance at a site owned or occupied by a consumer;

contribution, in relation to a gas producer, means an amount made available by the gas producer for the purposes of funding the rectification programme;

Department means the department of the Public Service principally assisting in the administration of the Energy Coordination Act 1994 Part 2;

Director means the Director of Energy Safety referred to in the Energy Coordination Act 1994 section 5;

gas appliance has the meaning given in the Gas Standards Act 1972 section 4;

gas installation has the meaning given in the Gas Standards Act 1972 section 4;

lower heating value gas means gas with a heating value that does not meet the heating value standards set out in the Gas Standards (Gas Supply and System Safety) Regulations 2000 regulation 5(2)(a) and (d), as in force immediately before 1 January 2009;

rectification programme has the meaning given in section 23(2);

reimbursement period means the period —

(a) beginning on the day determined under section 29; and

(b) ending on the day before the tenth anniversary of the day referred to in paragraph (a);

site, in relation to a consumer, means a place to which gas is supplied to the consumer through a connection point to a gas distribution system.

(2) For the purposes of this Part, any amount made available by a gas producer and credited to the Account before the commencement of this Part is to be taken to be a contribution from a gas producer.

(3) A reference in this Part to the cost of the rectification programme is a reference to the total of all amounts charged to the Account, whether before or after the commencement of the this Part, other than amounts charged for the purposes of section 25(1)(a).

Division 2 — Rectification programme

23. Director to establish and implement the rectification programme

(1) In this section —

relevant consumer installation means a consumer installation that is likely to become unsafe or dangerous in use if lower heating value gas were to be supplied to consumers through gas distribution systems.

(2) It is a function of the Director to establish and implement a programme (the rectification programme) for the modification or replacement of relevant consumer installations, so that, to the extent practicable, owners of those installations (whether consumers or not) are given the opportunity to have them modified or replaced in anticipation of their use being controlled or prohibited by an order under the Gas Standards Act 1972 section 13H.

(3) The Director need not perform the function under subsection (2) if, in the opinion of the Director, there is not sufficient money standing to the credit of the Account to fund the rectification programme.

(4) The regulations may provide for and in relation to matters relating to the rectification programme, including —

(a) the rights, duties and liabilities of owners of relevant consumer installations, and any other persons, in respect of the modification or replacement of those installations under the programme; and

(b) the ownership of gas installations, gas appliances and any other things supplied under the programme.

24. Payments into and out of the Account

(1) The following funds must be credited to the Account —

(a) all contributions from gas producers;

(b) income derived from the investment of money standing to the credit of the Account.

(2) The money standing to the credit of the Account may be applied by the Director for the following purposes —

(a) payment of costs and expenses incurred in, or in connection with, establishing and implementing the rectification programme;

(b) payment of costs and expenses associated with administering the Account;

(d) payment of any other costs and expenses incurred for the purposes of this Part.

25. Surplus funds to be repaid to gas producers upon completion of the rectification programme

(1) When the Director is satisfied that the money standing to the credit of the Account will not be applied (other than for the purposes referred to in section 24(2)(b) or (c)), the Director must ensure that within 4 months —

(a) the balance of the Account is paid to the gas producer or producers who made contributions; and

(b) notice is published in the Gazette that the rectification programme has been completed.

(2) The amount to be paid to a gas producer under subsection (1)(a) is an amount that bears to the total amount to be paid to gas producers under that subsection the same proportion as the total of the gas producer’s contributions bears to the total of all the contributions from gas producers.

26. Application of Financial Management Act 2006 and Auditor General Act 2006

(1) The provisions of the Financial Management Act 2006 and the Auditor General Act 2006 regulating the financial administration, audit and reporting of agencies apply to and in relation to the Account.

(2) The administration of the Account is, for the purposes of the Financial Management Act 2006 section 52, to be regarded as a service of the Department.

(3) The Financial Management Act 2006 section 20 does not apply to the Account.

27. Annual report of Department to include information about the rectification programme

Without limiting the Financial Management Act 2006 section 61, the Department’s first annual report after publication of the notice under section 25(1)(b) must contain the following information —

(a) the name of each gas producer who made one or more contributions and the amount of each contribution;

(b) the total amount of income derived from the investment of moneys forming part of the Account;

(d) the amount (if any) paid to each gas producer under section 25(1)(a).

Division 3 — Reimbursement scheme

28. Regulations may provide for reimbursement scheme

(1) In this section —

contributor means a gas producer who made a contribution (whether or not the gas producer supplies lower heating value gas during the reimbursement period);

relevant gas transmission pipeline means a gas transmission pipeline from which gas flows into a gas distribution system in the Coastal Supply Area constituted under the Energy Coordination Act 1994 section 11A(1) by the Energy Coordination (Coastal Supply Area) Order 2000;

supply, in relation to lower heating value gas, means the supply of lower heating value gas that will flow into a relevant gas transmission pipeline.

(2) A reference in this section to a gas producer who supplies lower heating value gas does not include a reference to a gas producer whose supply of lower heating value gas is less than 10 terajoules per day.

(3) The regulations may provide for and in relation to a scheme (the reimbursement scheme) under which the cost of the rectification programme is apportioned between gas producers who supply lower heating value gas during the reimbursement period.

(4) The regulations may do the following —

(a) provide for gas producers who supply lower heating value gas during the reimbursement period to be required, periodically and at the end of the reimbursement period —

(i) to reimburse one or more contributors; or

(ii) to reimburse one or more gas producers who supply lower heating value gas during the reimbursement period but who are not contributors; or

(iii) to do both of those things;

(b) confer functions on the Authority in relation to the reimbursement scheme, including the function of determining the amounts required to be reimbursed (the reimbursement amounts);

(c) specify the methods and principles to be applied by the Authority in determining reimbursement amounts or in performing any other function in relation to the reimbursement scheme;

(d) provide for the costs incurred by the Authority in performing its functions in relation to the reimbursement scheme to be recovered from gas producers who supply lower heating value gas during the reimbursement period;

(e) provide for interest to be payable on amounts that remain unpaid after becoming due and payable under paragraph (a) or (d) (the unpaid amounts);

(f) provide for the recovery of unpaid amounts, and interest on those amounts, by persons entitled under the regulations to be paid those amounts.

(5) A gas producer who supplies lower heating value gas after the reimbursement period cannot be required under the regulations to pay reimbursement amounts in relation to that supply.

29. Minister may determine beginning of the reimbursement period

For purposes of the definition of reimbursement period paragraph (a), the Minister may, by notice published in the Gazette, determine the day on which the reimbursement period begins.

Part 6 — General provisions

30. Relationship to Gas Access Laws

The regulations may provide for and in relation to the relationship between this Act and a Gas Access Law, including by providing for how the Gas Access Law is to have effect in relation to matters and things affected by this Act.

31. Coordinator to monitor and inquire into

It is a function of the Coordinator —

(a) to monitor the operation of this Act generally; and

(b) to inquire into or investigate particular matters that arise in relation to this Act or contracts that relate to the purposes of this Act or that are, or can be, modified under this Act.

32. Exemptions may be granted by Minister

(1) The Minister may, by order published in the Gazette, exempt from the application of this Act or specified provisions of this Act, wholly or to a specified extent —

(a) a specified person or persons of a specified class; or

(b) a specified thing or things of a specified class; or

(d) a specified activity relating to the sale, supply, storage or transportation of gas transported or to be transported through a gas transmission pipeline.

(2) Before making an order under subsection (1), the Minister must make the proposed order available for comment to the extent to which the Minister considers necessary in relation to the proposed exemption.

(3) An exemption may be —

(a) subject to specified conditions; and

(b) indefinite or for a specified period.

(4) The Minister may, by order published in the Gazette, amend or revoke an order under subsection (1).

(5) The Interpretation Act 1984 section 42 applies to an order under subsection (1) or (4) as if the order were regulations.

33. Review of Act

(1) The Minister must carry out a review of the operation and effectiveness of this Act as soon as is practicable after the expiration of 10 years from its commencement.

(2) The Minister is to prepare a report based on the review and, as soon as is practicable after the report is prepared (and in any case not more than 12 months after the expiration of the 10 year period referred to in subsection (1)), cause it to be laid before each House of Parliament.

34. Regulations

(1) The Governor may make regulations prescribing all matters that are required or permitted by this Act to be prescribed, or are necessary or convenient to be prescribed for giving effect to the purposes of this Act.

(2) The regulations may do the following —

(a) provide for and in relation to the giving, publishing and verification of information relating to the purposes of this Act, including information relating to the following —

(i) the entering into, amendment or content of a pipeline impact agreement or other contract;

(ii) the supply of gas that will flow into a gas transmission pipeline;

(iii) the actual, calculated or hypothetical quantity and quality of gas flowing into or out of a gas transmission pipeline or past specified points on a gas transmission pipeline;

(b) limit the liability a person has in relation to information given or published under paragraph (a);

(d) provide that equipment for measuring gas quantity and quality is to be treated as accurate in specified circumstances;

(e) modify the application of the provisions of Part 2 to particular persons, circumstances or things in respect of which the provisions would not otherwise apply so as to give effect to the purposes of that Part;

(f) provide for the exclusivity of the jurisdiction of an arbitrator or expert under section 9, 11 or 16, including in relation to other dispute resolution procedures under other written laws;

(g) provide for the extent to which the rules of evidence apply during the resolution of disputes under section 9, 11 or 16;

(h) provide for and in relation to the imposition and payment of fees and charges in connection with the performance of the functions of an arbitrator or expert under section 9, 11 or 16;

(i) provide that contravention of a provision of the regulations is an offence;

(j) provide, in relation to bodies corporate, for an offence to be punishable on conviction by the imposition of a fine not exceeding $50 000 and, if the contravention is of a continuing nature, a further fine not exceeding $20 000 in respect of each day or part of a day during which the contravention continued after the offender was notified by a specified person that the person is of the opinion that the offender is contravening the provision;

(k) provide, in relation to individuals, for an offence to be punishable on conviction by the imposition of a fine not exceeding $5 000;

(l) provide for the imposition of a minimum fine for an offence;

(m) relate the level of a fine to —

(i) the circumstances or extent of the offence;

(ii) whether the offender has committed previous offences and, if so, the number of previous offences that the offender has committed.

(3) If it is inappropriate to prescribe a set fee or charge in connection with the performance of a function of an arbitrator or an expert the regulations may provide for the method of calculating the fee or charge, including calculation according to the cost of performing that function.

(4) The regulations may adopt the text of any published document specified in the regulations —

(a) as that text exists at a particular date; or

(b) as that text may from time to time be amended.

(5) The text may be adopted —

(a) wholly or in part; and

(b) as modified by the regulations.

(6) The adoption may be direct (by reference made in the regulations), or indirect (by reference made in any text that is itself directly or indirectly adopted).

(7) The adoption of text is of no effect unless —

(a) the adopted text; and

(b) the amendments to the text or the text as amended (if relevant),

can at all reasonable times be inspected or purchased by the public.

Part 7 — Acts amended

Division 1 — Energy Coordination Act 1994 amended

35. Act amended

This Division amends the Energy Coordination Act 1994.

36. Section 26 amended

Delete section 26(3), (4) and (5).

Division 2 — Gas Pipelines Access (Western Australia) Act 1998 amended

37. Act amended

This Division amends —

(a) if this section comes into operation before the day on which the National Gas Access (WA) Act 2009 section 26 comes into operation — the Gas Pipelines Access (Western Australia) Act 1998; or

(b) otherwise — the Gas Pipelines Access (Western Australia) Act 1998 (as amended by the National Gas Access (WA) Act 2009 and cited as the Energy Arbitration and Review Act 1998).

38. Section 73 amended

Before section 73(1)(d) insert:

(da) under the Gas Supply (Gas Quality Specifications) Act 2009; or

Notes

This is a compilation of the Gas Supply (Gas Quality Specifications) Act 2009 and includes amendments made by other written laws. For provisions that have come into operation see the compilation table. For provisions that have not yet come into operation see the uncommenced provisions table.

Compilation table

Short title	Number and year	Assent	Commencement
Gas Supply (Gas Quality Specifications) Act 2009	35 of 2009	3 Dec 2009	Pt. 1: 3 Dec 2009 (see s. 2(a)); Act other than Pt. 1: 27 Mar 2010 (see s. 2(b) and Gazette 26 Mar 2010 p. 1133)

Uncommenced provisions table

To view the text of the uncommenced provisions see Acts as passed on the WA Legislation website.

Short title	Number and year	Assent	Commencement
Petroleum Legislation Amendment Act 2024 Pt. 5 Div. 6 and s. 433(2), 434(2), 435(2) and 436(2)	17 of 2024	14 May 2024	To be proclaimed (see s. 2(b))

Defined terms

[This is a list of terms defined and the provisions where they are defined. The list is not part of the law.]

Defined term Provision(s)

access determination 3(1)

Account 22(1)

Authority 22(1)

consumer 22(1)

consumer installation 22(1)

contribution 22(1)

contributor 28(1)

Coordinator 3(1)

Department 22(1)

Director 22(1)

downstream agreement 15

exempt contract 3(1)

Gas Access Law 3(1)

gas appliance 22(1)

gas consumer 3(1)

gas contract 14(1)

gas distribution system 3(1)

gas installation 22(1)

gas producer 3(1)

gas storage facility 3(1)

gas transmission pipeline 3(1)

inlet point 3(1)

lower heating value gas 22(1)

operator 3(1)

Part 4 pipeline 15

parties 8(1)

PIA pipeline 3(1), 5(1)

pipeline 3(1)

pipeline impact agreement 3(1), 6(1)

pipeline service 3(1)

pipeline services agreement 3(1)

plant and equipment costs 15

rectification programme 22(1), 23(2)

reference specification 3(1)

reimbursement amounts 28(4)

reimbursement period 22(1)

reimbursement scheme 28(3)

relevant consumer installation 23(1)

relevant effects 3(1), 7(2)

relevant gas quality specification 15

relevant gas transmission pipeline 28(1)

short‑term situation 10(2)

site 3(1), 22(1)

specified 3(1)

standard specification 3(1)

supply 28(1)

unpaid amounts 28(4)

user 3(1)

This work is licensed under a Creative Commons Attribution 4.0 International Licence (CC BY 4.0). To view relevant information and for a link to a copy of the licence, visit www.legislation.wa.gov.au.

By Authority: GEOFF O. LAWN, Government Printer

Western Australia

Gas Supply (Gas Quality Specifications) Act 2009

Western Australia

Gas Supply (Gas Quality Specifications) Act 2009

Contents

Part 1 — Preliminary

Short title 2
Commencement 2
Terms used 2

Part 2 — Gas quality and capacity of PIA pipelines

Purposes of this Part 7
PIA pipelines 7
Controlling the quality of gas flowing into PIA pipelines 8
Content of pipeline impact agreements 9
Formation of pipeline impact agreements 11
Pipeline impact agreements — dispute resolution 12
Short‑term situations 13
Compensation for adverse effects on certain pipeline users 14
Injunctions 14

Part 3 — Modifying gas contracts

Standard gas quality specifications for pipelines 17
Modifying gas contracts 17

Part 4 — Compensation for certain gas consumers and operators of gas transmission pipelines and gas storage facilities

Terms used 19
Regulations may provide for compensation scheme 19
Compensation scheme for certain gas consumers 20
Compensation scheme for operators of Part 4 pipelines and operators of gas storage facilities 22
Double compensation 23
Part 4 pipeline becoming PIA pipeline 24

Part 5 — Rectifying consumer installations

Division 1 — Preliminary

Purposes of this Part 25
Terms used 25

Division 2 — Rectification programme

Director to establish and implement the rectification programme 27
Payments into and out of the Account 28

The Act organises a set of interlocking concepts that allocate risk and process around the supply of gas that departs from a pipeline’s prescribed gas quality reference specification. Key concepts and their statutory features are:

PIA pipeline and reference specification. A PIA pipeline is a pipeline, or part of a pipeline, declared by the Minister to be a PIA pipeline (s 5(1)). The “reference specification” for a pipeline is the gas quality specification prescribed for that pipeline (s 3). The Minister must make, amend or revoke PIA declarations only in accordance with regulatory criteria and procedure (s 5(2)).
Pipeline impact agreement (PIA). If a gas producer proposes to supply gas into a PIA pipeline that does not meet the pipeline’s reference specification, a PIA between the gas producer and the pipeline operator is required. The Act imposes minimum content for a PIA: inlet point identification, the gas quality specification to be complied with for the supply, the maximum quantity to be supplied, the proposed commencement day or change day, a statement of the “relevant effects” on capacity, operations and maintenance and how those effects will be dealt with, duration, and any prescribed matters (s 6(1); s 7(1)). The “relevant effects” are defined as reductions in capacity and effects on operations and maintenance attributable to the gas not complying with the reference specification (s 7(2)).
Time delay. New PIAs or amendments do not take effect for the purposes of the quality and quantity limits for 18 months after entering into or amendment, subject to Ministerial power to shorten where no material adverse effects (s 6(2,7)).
Enforcement and interim protection. Operators may reduce or stop flow and reduce allocation at inlet points if the producer fails to comply (s 6(3)), and may obtain injunctions from the Supreme Court restraining or requiring conduct (s 12).
Dispute resolution and expert determinations. The regulations may prescribe arbitration for PIA disputes and may provide that disputes about relevant effects are resolved by an expert whose determination is final and binding (s 9(2)(a)-(b)). The regulations may also provide for the interests of pipeline users to be taken into account and for determinations to be incorporated into agreements (s 9(2)(c); s 9(3)).
Contract modification powers. Regulations may modify existing and future gas contracts to align them with a statutory gas quality specification and deal with consequential effects (s 14). A limitation applies so that regulations cannot provide for a less stringent specification than the standard specification for gas flowing out of a PIA pipeline (s 14(4)).
Compensation regimes. Part 4 authorises regulations to create a compensation scheme for affected gas consumers, operators of Part 4 pipelines and operators of gas storage facilities (s 16). For gas consumers, the “relevant” gas quality specification is the specification the consumer was entitled to immediately before 1 January 2009, subject to eligibility requirements (s 17). The regulations are to limit recoverable costs to direct costs and may offset benefits (s 16(3)).
Rectification programme and funding account. Part 5 tasks the Director of Energy Safety with establishing and implementing a rectification programme for consumer installations likely to become unsafe if lower heating value gas were supplied through distribution systems (s 23). The Gas Producers Contribution Account receives contributions from gas producers and funds the programme; surplus funds must be repaid to contributors upon programme completion (ss 24-25).
Reimbursement scheme. Regulations may create a reimbursement scheme to apportion rectification costs among gas producers supplying lower heating value gas during a reimbursement period; supplies under 10 terajoules per day are excluded from being “suppliers” for this purpose (s 28(2)). The Authority may be given determining powers, recover costs and interest, and regulations may provide recovery mechanisms (s 28(4)).
Limits and anti‑duplication. Contracts and access determinations cannot operate to require compensation for effects or costs already provided for under a PIA or Part 4 scheme; the Act thus prevents double recovery (s 19).
Delegation and regulations. The Act gives broad regulation‑making powers (s 34), including adopting external texts, prescribing measurement standards and making contravention of regulations an offence with specified penalty caps (s 34(2)(c)-(k)).

These concepts create an operational rule: a gas producer who wishes to supply non‑complying gas to a declared PIA pipeline must first ensure a compliant PIA is in place (with minimum content) and may have to wait for regulatory modifications to contracts and an 18‑month vesting period unless a shorter period is allowed by the Minister (s 6(1)-(2), s 14(2), s 6(7)). Operators receive statutory tools to protect pipeline integrity and contractual user rights (ss 6(3), 11, 12). Compensation and rectification are financed by producer contributions, but statutory eligibility, time limits and regulatory limits constrain recoverable amounts (ss 17, 24, 25, 16(3), 17(5)).

The Act creates distinct statutory stakeholders and thereby allocates costs, decision rights and compliance obligations among them.

Gas producers. Defined in s 3(1) to include holders of petroleum production licences and prescribed persons (excluding operators of gas storage facilities), gas producers are the primary parties required to pay into the rectification Account (s 24(1)(a)) and potentially to reimburse contributors under a reimbursement scheme (s 28). They are prohibited from supplying non‑reference quality gas into a PIA pipeline unless conditions in s 6(1) are met (entry into a compliant PIA, compliance with the PIA’s gas quality specification, not exceeding the PIA’s maximum quantity and relevant regulatory contract modifications having come into effect). Gas producers also face potential liability under regulations establishing compensation schemes for consumers, Part 4 pipeline operators, and storage operators (s 16(1)), although the Act limits producer liability to supplying gas that does not comply with the pipeline reference specification (s 16(6)).
Operators of gas transmission pipelines. “Operator” is defined in s 3(1) as the registered licence holder under the Petroleum Pipelines Act 1969 and prescribed persons. Operators of PIA pipelines gain specific powers: to negotiate PIAs, to reduce flow and allocation at inlet points if a producer breaches s 6(1) (s 6(3)), and to seek injunctions in the Supreme Court to restrain non‑compliant supply or compel compliance (s 12). Operators are also a focus of the Act’s protective purpose: PIAs must address relevant effects on the capacity, operations and maintenance of PIA pipelines (s 7(1)(e)), and the Minister cannot, in exercising PIA designation, act other than in accordance with the regulations (s 5(2)).
Users of pipelines (shippers, purchasers under pipeline services agreements). “User” means a person provided pipeline services under a pipeline services agreement (s 3(1)). Part 2 seeks to ensure users are not materially disadvantaged by the way relevant effects are determined or dealt with (s 4(c)). The Act allows regulations to create compensation schemes for users of PIA pipelines in respect of adverse effects on users’ rights resulting from the way pipeline capacity effects are handled in a PIA (s 11). The regulations may provide dispute resolution and enforcement mechanisms in favour of users (s 11(2)).
Gas consumers. There are two statutory consumer categories. For Part 4 compensation, “gas consumer” is defined by s 3(1) as a person who receives gas transported through a gas transmission pipeline and who, in the previous 12 months, consumed at least one terajoule at any one site. Eligible consumers under the compensation scheme must have downstream agreements in force immediately before 1 January 2009 (s 17(4)), and entitlement to compensation in relation to gas delivered after 1 January 2029 is excluded (s 17(5)). Separately, Part 5 targets “consumers” under the Gas Standards Act 1972 who consumed no more than 0.18 terajoules at any one site in the previous 12 months (s 22). These small consumers are the intended beneficiaries of the rectification programme for consumer installations that might become unsafe when lower heating value gas is supplied (s 23).
Operators of gas storage facilities. The Act includes provision for operators of gas storage facilities with storage capacity more than 50 terajoules to be prescribed (s 3). Regulations may create compensation schemes for storage operators for costs and loss of capacity attributable to receipt of gas not complying with their relevant gas quality specification (s 16, s 18).
Regulators and public officials. The Minister has multiple decision powers: declaring PIA pipelines (s 5), exempting persons or activities from the Act (s 32), determining the beginning of the reimbursement period (s 29), and issuing directions in short‑term situations if regulations permit (s 10(3)(b)). The Director of Energy Safety must establish and implement the rectification programme (s 23). The Economic Regulation Authority may be conferred functions to determine reimbursement amounts and recover costs (s 28(4)(b)-(d)). The Coordinator of Energy is assigned monitoring and inquiry functions (s 31).
Contracting parties and industry participants. Existing pipeline services agreements, gas contracts and access determinations may be modified by regulation to have different gas quality effect (s 14). Section 19 limits contractual double recovery, but the regulatory power to modify contracts is broad and can alter long‑standing contractual allocations of risk and price.

Concentrated benefits and diffuse costs appear through these allocations. Gas producers who can develop lower heating value gas may benefit commercially from the Act’s facilitation of such supplies to PIA pipelines, subject to meeting PIA and regulatory conditions. Pipeline operators and users face concentrated operational and contractual risks; the Act provides them with statutory remedies and negotiated PIAs to manage those risks. Small consumers (low‑volume) receive a targeted rectification programme funded by producer contributions; larger consumers (≥1 TJ/yr) are eligible for compensation under more limited circumstances and subject to time limits. The regulatory architecture places the compliance and administrative burden largely on gas producers and pipeline operators, while the Director and Authority are given administrative tasks funded from producers’ contributions and recovered costs.

The Act allocates specific duties, rights and discretions. Below are the principal ones with statutory location and immediate practical effect.

Duties on gas producers

Duty not to supply into a PIA pipeline non‑complying gas without a PIA: A gas producer must not supply gas to a PIA pipeline that does not comply with the pipeline’s reference specification unless a compliant PIA exists, the gas complies with the PIA’s gas quality specification, the quantity does not exceed the PIA’s maximum and relevant regulations modifying contracts have come into effect (s 6(1)). The Criminal Code s 177 is expressly not applied to this obligation (s 6(8)).
Financial duties: Gas producers are required to make contributions to the Gas Producers Contribution Account to fund the rectification programme (s 24(1)(a)), and regulations may require producers who supply lower heating value gas during the reimbursement period to reimburse contributors (s 28(3)-(4)).

Rights and remedies for pipeline operators

Rights to act on producer non‑compliance: If a producer fails to comply with s 6(1), the pipeline operator may reduce the flow (including to zero) and reduce allocations to users at the inlet point in accordance with regulations (s 6(3)).
Right to equitable relief: Operators may apply to the Supreme Court for an injunction restraining or compelling conduct related to non‑compliance (s 12(1)). The Court may grant interim or final injunctions; the statutory thresholds are permissive and include power to grant by consent (s 12(2)-(5)).
Contractual override: Operators may take statutory actions under s 6(3) or s 12 notwithstanding any relevant pipeline services agreement (s 6(5)).

Rights and duties in PIAs

Minimum content required: PIAs must contain specified elements (s 7(1)(a)-(f)), including the inlet point, PIA gas quality specification, maximum quantity, commencement date, statement of relevant effects and proposed treatment, duration and prescribed matters.
Formation procedures and defaults: Unless parties agree otherwise, the default procedure provided in regulations applies to PIA formation (s 8(1)-(2)). If the relevant effects are not in dispute and a prescribed method deals with them, the regulations’ default PIA may become the proposed PIA and, when matters are not in dispute, may become the operative PIA (s 8(3)-(4)). The regulations may adopt standard form agreements published by the Minister (s 8(7)).

Dispute resolution and expert determinations

Regulatory dispute mechanisms: The regulations may provide for arbitration and for expert determinations to resolve disputes about relevant effects; experts’ determinations may be final and binding and become part of PIAs (s 9(2)(a)-(b), s 9(3)). The regulations may provide for the interests of pipeline users to be considered (s 9(2)(c)).

Compensation and limitation duties

Compensation schemes by regulation: The regulations may create compensation schemes for PIA pipeline users, Part 4 pipeline operators, gas storage operators and qualifying gas consumers, with limits on recoverable costs to direct costs and offset by benefits (ss 11, 16(1)-(3), 17(3), 18(4)).
Double recovery disallowed: Existing contracts or access determinations do not have effect to the extent they would otherwise provide compensation for effects or costs covered by a PIA or by Part 4 compensation schemes (s 19(1)). This changes the effective entitlement that parties may have had under private law or contract.

Director and Authority duties

Director’s rectification duty: The Director must establish and implement the rectification programme for installations likely to become unsafe if lower heating value gas were supplied, subject to Account funding sufficiency (s 23(2)-(3)).
Authority functions: Regulations may confer functions on the Authority in relation to reimbursement, including determining reimbursement amounts and recovering costs (s 28(4)(b)-(d)).

Ministerial discretions and duties

PIA declaration and exemptions: The Minister may declare PIA pipelines subject to regulations (s 5); may grant exemptions from the Act or specified provisions (s 32); and must undertake a statutory review of the Act 10 years after commencement (s 33).
Reimbursement period start: The Minister may determine the day the reimbursement period begins by Gazette notice (s 29).

Regulatory powers

Regulations may modify gas contracts and access determinations to align with a statutory gas quality specification (s 14(2)), adopt standard specifications (s 13), prescribe short‑term situation rules (s 10), set dispute resolution frameworks (s 9), set measurement standards and treat measuring equipment as accurate in certain circumstances (s 34(2)(c)-(d)), and create offences and fines (s 34(2)(i)-(k)). Regulations may also adopt published texts and provide for public access (s 34(4)-(7)).

Practical consequences of these duties and rights include: gas producers needing to budget for Account contributions and potential reimbursements, and to negotiate technically detailed PIAs; pipeline operators needing to maintain capacity, measurement and allocation systems and being able to take statutory steps to protect pipeline integrity; users and consumers needing to evaluate eligibility and timing for compensation or rectification; and regulators bearing the task of making rules and running or conferring functions for reimbursement and rectification. The Act shifts several private law risks into regulated processes and statutory remedies, with the detailed modalities largely left to regulations.

The Act centralises enforcement in administrative and civil remedies while delegating criminalising powers, fine levels and specific measurement or reporting offences to the regulations.

Regulatory enforcement powers and offences

Regulations may make contravention of a provision an offence (s 34(2)(i)). The Act expressly permits regulations to specify monetary penalties with caps: for bodies corporate, fines not exceeding $50 000 and daily fines up to $20 000 for continuing contraventions after notice (s 34(2)(j)); for individuals, fines not exceeding $5 000 (s 34(2)(k)). The regulations may also provide for minimum fines and for calibrating fines to circumstances such as severity and prior offending (s 34(2)(l)-(m)). The Act permits regulations to set fees and charges for arbitrators or experts (s 34(2)(h)), and to limit liability for information provided under regulation (s 34(2)(b)).

Civil enforcement and injunctive relief

Pipeline operators may reduce flow or allocation at inlet points where producers fail to meet s 6(1) requirements, in accordance with regulations (s 6(3)). That operational remedy is immediate and administrative when authorised by regulation.
Injunctions: The Supreme Court may grant injunctions on application by an operator where it is satisfied a gas producer has engaged, is engaging or proposes to engage in conduct constituting failure to comply with s 6(1) (s 12(1)). The Court may grant injunctions by consent, may grant interim injunctions, and may exercise its discretion even where the respondent has not acted previously or where there is no imminent danger of damage (s 12(2)-(5)). The Court may also vary or discharge injunctions (s 12(6)).

Dispute resolution under the Act

The regulations may create arbitration or expert determination pathways for disputes concerning PIAs, allocation or flow reductions, and compensation schemes (ss 9, 11, 16). The regulations may provide for exclusivity of jurisdiction of an arbitrator or expert (s 34(2)(f)), and for the rules of evidence to be adapted (s 34(2)(g)). Where an expert determines relevant effects, those determinations may be final and binding and become part of the PIA (s 9(2)(b), s 9(3)).

Limits on criminal enforcement

The Act explicitly removes the application of Criminal Code s 177 to the obligation in s 6(1) (s 6(8)). The Act does not otherwise create specific criminal offences on its face other than by empowering regulations to do so (s 34(2)(i)), and by providing penalty ceilings. The practical effect is that the primary immediate enforcement instruments are civil and regulatory rather than criminal.

Compensation enforcement and anti‑duplication

Regulations may provide mechanisms for enforcing compensation entitlements under schemes for pipeline users, consumers and operators, including arbitration and enforcement of arbitral determinations (ss 11(1)-(2), 16(2)(a), 16(2)(c)). Section 19 prevents double compensation by reducing the legal force of contractual or access determination provisions that would otherwise allow recovery of the same effects or costs covered by a PIA or Part 4 scheme (s 19(1)). Enforcement of payments under reimbursement schemes is provided for in regulations (s 28(4)(f)), and interest can be imposed on unpaid amounts (s 28(4)(e)).

Practical enforcement implications

Operators have both administrative and judicial tools to stop or limit supply of non‑complying gas (s 6(3), s 12). The regulations will determine the procedural specifics for measurement, verification and flow adjustments (s 34(2)(c)-(d)), meaning that operational enforcement depends heavily on how regulations define measurement accuracy, allocation rules and notice procedures.
The Act’s reliance on arbitration and expert finality (s 9(2)(b)) can produce fast, technical resolutions but may limit wider judicial review or prolong practical enforcement if concurrent jurisdictional or evidentiary questions arise; the regulations may make the arbitral or expert jurisdiction exclusive (s 34(2)(f)), which will shape procedural strategy.
Monetary penalties are capped in the regulations but are also potentially significant for corporates (s 34(2)(j)). The Act allows for daily fines on continuing contraventions once notice has been given.
The Act’s anti‑duplication rule (s 19) alters private contractual remedies, shifting recovery expectations and enforcement strategies for parties that might previously have relied on contract terms to recover for quality‑related losses.

Overall, enforcement under the Act is a mix of administrative control (flow/allocation), civil relief (injunctions), alternative dispute resolution (arbitration/expert determinations) and regulatory monetary penalties as prescribed. The precise contours and practical enforceability rest significantly on the content of regulations that the Governor may make under s 34.

The Act is designed to operate alongside, and in several places to modify the practical effect of, existing statutory regimes and private law instruments. The text contains express relationship points to other legislation and to contractual instruments.

Interaction with Gas Access Laws and pipeline access frameworks

The Act defines “Gas Access Law” to include the National Gas Access (WA) Law and the former Gas Pipelines Access (WA) Law (s 3(1)). Section 30 allows regulations to provide for and in relation to the relationship between this Act and a Gas Access Law, including how the Gas Access Law is to have effect in relation to matters affected by this Act. Section 6(5) expressly provides that operators’ statutory powers to reduce flows or allocations or to seek injunctions may be exercised “despite any relevant pipeline services agreement”, indicating the Act’s capacity to displace or operate concurrently with contractual access rights.
Part 7 amends existing energy statutes: it deletes sections from the Energy Coordination Act 1994 (s 36) and inserts a new item into the Gas Pipelines Access (Western Australia) Act 1998 s 73 to include references to this Act (s 38). The compilation notes transitional connections to the National Gas Access (WA) Act 2009 (s 37).

Contract law and modification powers

The regulations may modify existing and future gas contracts to give them effect so that gas supplied under them need only comply with a regulatory gas quality specification (s 14(2)(a)-(b)). They can also specify that certain references to gas quality specifications in contracts are to be read as references to a specification provided by regulation. Regulations may deal with the effects of such modifications, including by providing that occurrences are not breaches or that rights and liabilities are altered (s 14(2)(c), s 14(5)). However, there is an express limitation: regulations made under s 14(2)(a) or (b) cannot provide, in relation to gas flowing out of a PIA pipeline, for a gas quality specification that is less stringent than the standard specification for the pipeline (s 14(4)).
Section 19 prevents double compensation by excluding the effect of contracts or access determinations to the extent they would otherwise provide compensation for effects or costs covered by a PIA or Part 4 scheme. This operates as a statutory override reducing parties’ contractual expectations where statutory schemes apply.

Interaction with the Criminal Code and measurement standards

The Act excludes Criminal Code s 177 from applying to the obligation in s 6(1) (s 6(8)), creating a narrow carve‑out; the Act otherwise delegates criminal offence creation and penalty levels to the regulations (s 34(2)(i)-(m)).
The regulations may impose or modify measurement standards, and declare measuring equipment to be accurate in specified circumstances (s 34(2)(c)-(d)). Given many rights (allocation reductions, proof of non‑compliance, compensation entitlements) depend on measurements, these regulatory measurement rules will be crucial for interaction with other laws and contracts that rely on measured quantity and quality.

Administrative law, review and public law interface

The Minister’s powers to declare PIA pipelines, to exempt persons or activities, and to determine reimbursement commencement dates are subject to procedural requirements set by regulation and to consultative obligations (s 5(2), s 32(2)). The Act also mandates a statutory review of its operation ten years after commencement (s 33), which is an institutional check intended to adjust the interface with other laws over time.
The Act confers monitoring and inquiry functions to the Coordinator of Energy (s 31), enabling administrative oversight of how this Act interacts with contracts and Gas Access Laws.

Practical cross‑effects and potential frictions

Contract modification powers (s 14) and anti‑duplication (s 19) create direct legal interaction with private law entitlements. Parties relying on access determinations or contract clauses for quality‑related compensation may find those rights curtailed or transformed.
The Act’s strong reliance on regulations to determine measurement standards, dispute resolution, compensation limits and enforcement means many cross‑effects will depend on the content of subordinate rules. That raises transitional and timing challenges where existing contracts and access regimes are in force pending regulation‑making.
The Act contemplates temporary short‑term modifications during supply disruptions (s 10). Regulations or Ministerial directions may temporarily alter the application of parts of the Act, affecting how it interacts with other statutory obligations and contracts for short durations, subject to specified maximum periods (s 10(4)).

In short, the Act is designed to overlay the existing access, pipeline and contract landscape, authorising regulatory modification of contracts and access arrangements, providing statutory remedies for operators and users, and creating funding and compensation mechanisms that will reallocate legal entitlements. The exact contours of those interactions are largely delegated to the regulations, meaning practitioners must read the Act alongside the regulations and any Ministerial instruments in force.

The compilation metadata included in the Act text provides the immediate amendment and commencement history and indicates further uncommenced provisions from later legislation.

Key dates and enactment

The Gas Supply (Gas Quality Specifications) Act 2009 received assent on 3 December 2009 (compilation table). Part 1 (preliminary matters) commenced on the day of assent (s 2(a)); the remainder of the Act commenced by proclamation on 27 March 2010 (s 2(b); Gazette reference in the compilation table).

Amendments to other Acts effected by this Act

Part 7 of the Act amends other statutes: Division 1 amends the Energy Coordination Act 1994 by deleting section 26(3), (4) and (5) (s 36). Division 2 amends the Gas Pipelines Access (Western Australia) Act 1998 (s 37) and inserts an additional ground into section 73(1) to reference proceedings under the Gas Supply (Gas Quality Specifications) Act 2009 (s 38). The effect is to integrate the new Act into the spectrum of energy and pipeline legislation.

Subsequent amendments and uncommenced provisions noted

The compilation contains an “Uncommenced provisions table” referring to the Petroleum Legislation Amendment Act 2024 Pt. 5 Div. 6 and specified sections (s 433(2), 434(2), 435(2), 436(2)) as assent on 14 May 2024 with parts to be proclaimed (compilation). The Act’s text as presented includes the 2024 compilation note, but the actual content or effect of those uncommenced amendments is not reproduced within the Act’s principal text, so the operational effect depends on proclamation.

Statutory review requirement

The Minister must carry out a review of the operation and effectiveness of the Act as soon as practicable after 10 years from commencement and prepare a report to be laid before Parliament not more than 12 months after the expiry of the ten‑year period (s 33). Given the commencement of the operative parts on 27 March 2010, this review requirement fell due after March 2020, although the Act text does not record whether the review occurred or whether the report was laid.

Delegation and future modification potential

The Act anticipates extensive regulation-making (s 34), which means many technical and operational details have been designed to be implemented or amended without further primary legislation. Consequently, the Act’s effective application can change significantly through subordinate instruments, subject to parliamentary disallowance and the consultation requirements the Act sets for some instruments (for example s 3(2) requiring Minister consultation before amending a reference or standard specification).

Transitional provisions

The Act provides a specific transitional rule: a PIA entered into after 1 January 2009 and before the commencement of Part 2 is to be taken to comply with the minimum requirements in s 7 if it substantially complies with the key elements (s 7(4)). That transitional rule is intended to recognise pre‑existing commercial arrangements that were entered into in the lead‑up to the Act.

Practical note for practitioners

Because the Act delegates substantive content to regulations and Ministerial instruments, amendment history is not limited to Acts in Parliament. Practitioners must monitor regulations, Gazette notices (for PIA declarations, exemptions and reimbursement commencement determinations under ss 5, 29, 32), and any Ministerial determinations that shorten the 18‑month vesting period for PIAs (s 6(7)). The Act’s amendment of other statutes (Energy Coordination Act and Gas Pipelines Access Act) also alters the broader legislative ecosystem in which access and arbitration disputes operate.

The Act text supplied does not record any judicial decisions or litigation that interpret or apply its provisions. There are no cases listed or summarised in the statute book text provided. The Act, however, creates multiple avenues and likely dispute loci that could generate litigation or arbitral challenges, based on the structure the Act sets:

Injunctions in the Supreme Court. Section 12 provides an express cause of action for pipeline operators to seek injunctions against gas producers for non‑compliance with s 6(1). The Court has broad discretion under s 12 and may grant interim relief, grant relief by consent, and exercise power regardless of prior conduct or imminent danger. This statutory route is likely the primary path for urgent judicial relief to stop supply of non‑complying gas or to compel remedial action.
Arbitration and expert determinations. The Act delegates dispute resolution to regulations, permitting arbitration and expert determinations whose findings can be final and binding (s 9(2)(a)-(b), s 9(3)). Where the regulations confer exclusivity on arbitrators or experts (s 34(2)(f)), parties may be limited to arbitral remedies and may face constrained judicial review, save for jurisdictional error or public law challenges.
Contract and access dispute interplay. Section 14 permits regulations to modify gas contracts and access arrangements, and s 19 restricts contractual compensation where statutory schemes apply. These provisions create potential litigation over whether regulations validly modified contracts, whether a particular contractual clause is displaced by s 19 and whether a party has been deprived of rights without lawful process. Such matters could give rise to judicial review or private law claims.
Enforcement and measurement disputes. Because the Act contemplates regulations prescribing measurement standards and treatment of measuring equipment (s 34(2)(c)-(d)), disputes about accuracy, measurement methods and resulting allocation reductions are likely candidates for technical expert determinations, arbitration and potentially court proceedings if arbitrators’ jurisdictional limits are contested.
Compensation scheme claims. If regulations are enacted under ss 11 and 16 to create compensation schemes, disputes about entitlement, causation (whether losses are attributable to non‑complying gas), quantum and offsets (regulations may limit recoverable costs to direct costs and offset benefits, s 16(3)) will arise, potentially in arbitration or court depending on the dispute resolution framework in the regulations.

Because the Act itself confers strong regulatory and arbitral dispute resolution mechanisms, litigation practice under the Act will depend heavily on the content of the regulations enacted under s 34. Absent those regulations, the core judicial route available in the Act text is the Supreme Court’s injunction jurisdiction (s 12), coupled with ordinary private law remedies (breach of contract/tort) where relevant. The Act does not identify any particular cases or precedents; practitioners should therefore map disputes against the regulations once made and anticipate that many disputes will be channelled into arbitration or expert determination schemes designed for technical pipeline issues.

The Act contains several provisions and structural features that may produce unexpected legal or commercial outcomes absent careful attention to the text and the subordinate rules.

Heavy reliance on regulations for substantive mechanics. Many critical operational elements are delegated: PIA declaration criteria and procedure (s 5(2)); default PIA formation and content mechanics (s 8); dispute resolution, including final binding expert determinations (s 9); compensation scheme design and caps (ss 11, 16); contract modification specifics (s 14); measurement standards and accuracy presumptions (s 34(2)(c)-(d)); and offence definitions and penalty levels (s 34(2)(i)-(m)). Until the regulations are in place, the Act sets policy directions but leaves practical detail unsettled.
18‑month “no‑effect” period for PIAs. A PIA entered into, or an amendment of a PIA, does not take effect for the purposes of the PIA’s gas quality and maximum quantity for 18 months after entry or amendment (s 6(2)). This creates a significant lag between agreement and enforceable change, potentially affecting project timelines and investment decisions. The Minister may reduce this period if satisfied no material adverse effect will result (s 6(7)), but that is a Ministerial discretion that requires demonstration.
Operators can act despite contractual terms. The operator’s statutory powers to reduce flow or allocation and to obtain injunctions can be exercised “despite any relevant pipeline services agreement” (s 6(5)). Parties cannot rely on pipeline services agreements to bar operator use of statutory remedies for non‑compliance with s 6(1).
Two different “consumer” definitions with different thresholds and benefits. For compensation under Part 4 a “gas consumer” requires consumption of at least one terajoule at a site in the last 12 months (s 3(1)). For the rectification programme Part 5 targets “consumers” under the Gas Standards Act 1972 who consumed no more than 0.18 terajoules at any one site in the last 12 months (s 22(1)). Practitioners must not confuse the two: large consumers may be eligible for Part 4 compensation but not for rectification; small consumers are eligible for rectification but not Part 4 compensation.
Time‑limited consumer compensation. Gas consumers’ entitlement to compensation under the Part 4 scheme is tied to downstream agreements in force immediately before 1 January 2009 (s 17(4)), and claim rights against deliveries after 1 January 2029 are excluded (s 17(5)). These historical and temporal constraints narrow the class of eligible claimants.
“Double compensation” prohibition alters contract expectations. Section 19 removes the effect of contracts or access determinations to the extent they would otherwise provide compensation for effects or costs covered by PIAs or Part 4. Parties that relied on contractual risk allocation for quality‑related compensation should reassess exposure and remediation expectations.
Exclusion of certain criminal provisions. The Act excludes application of Criminal Code s 177 to s 6(1) (s 6(8)), meaning the statutory non‑supply obligation is not criminalised under that section. The wider criminal enforcement architecture depends on regulations (s 34), so practitioners should not assume criminal enforcement applies absent regulatory offences.
Reimbursement scheme thresholds. The reimbursement scheme excludes supplies under 10 terajoules per day from being treated as supplies for the purposes of the scheme (s 28(2)). A gas producer with supply below this threshold will not be treated as a supplier required to reimburse, even if its supply contributes to aggregate effects.
Surplus funds returned to contributors. The rectification Account is to repay surplus funds to gas producers who made contributions once the Director is satisfied the Account’s balance will not be applied other than for specified narrow purposes; the repayment is pro rata to contributions (ss 24-25). Producers should therefore treat Account contributions as potentially refundable, not a sunk cost, but timing and the Director’s satisfaction are administrative levers.
Regulations can override contractual quality. The regulations may modify existing contracts to adopt a statutory gas quality specification (s 14). Parties should beware that contractual references to gas quality may be read down or replaced by statutory references once the regulations are made.
Potential exclusivity of alternate dispute forums. The regulations may provide for exclusivity of arbitral or expert jurisdiction in resolving disputes under ss 9, 11 or 16 (s 34(2)(f)). Parties wishing to preserve broader judicial remedies should check whether regulations bar court avenues for particular disputes.
Ministerial discretion and consultation ambiguity. The Minister must consult before amending a reference or standard specification (s 3(2)) and must make proposed exemptions available for comment to the extent the Minister considers necessary (s 32(2)). The “to the extent the Minister considers necessary” language provides considerable executive discretion over consultation scope and may affect procedural fairness and stakeholder expectations.
Measurement and evidentiary presumptions. Regulations may treat metering equipment as accurate in specified circumstances and can limit application of evidentiary rules in dispute resolution (s 34(2)(c)-(g)). Given the technical nature of disputes over quality and quantity, such presumptions could significantly affect the allocation of proof and the cost of challenging measurements.

Each of these “gotchas” is grounded in specific provisions of the Act; they are potential operational or legal traps for producers, operators, users and small consumers unless the regulations and administrative practices are closely reviewed and factored into commercial and compliance planning.

Compliance under the Act requires different actions depending on the role of the entity: gas producer, pipeline operator, gas consumer, or regulator. The following is a practical checklist mapped to statutory duties and rights.

For gas producers (primary obligations)

Identify pipeline status and reference specifications. Before proposing to supply gas, determine whether the target pipeline or part of pipeline is a PIA pipeline (s 5(1)) and obtain the pipeline’s reference specification (s 3). Monitor the Gazette for PIA declarations and any changes made in accordance with regulations (s 5(2)).
Do not supply non‑complying gas into a PIA pipeline without a compliant PIA. Section 6(1) makes it an express statutory condition: enter a pipeline impact agreement with the pipeline operator that meets s 7 minimum content (inlet point, gas quality spec, maximum quantity, commencement date, relevant effects and proposed treatment, duration), ensure the gas supplied complies with the PIA’s gas quality specification, ensure the quantity does not exceed the PIA maximum, and confirm that regulations under s 14(2)(a) modifying affected contracts have come into effect.
Plan for the 18‑month vesting period. New PIAs and amendments do not take effect for the purposes of quality and quantity for 18 months (s 6(2)). Unless the Minister shortens this period (s 6(7)), do not expect immediate operational entitlement to flow non‑complying gas. Where timing is critical, seek early Ministerial engagement to demonstrate no material adverse effects.
Budget for contributions and potential reimbursements. Producers must fund the rectification Account (s 24(1)(a)) and may be required to reimburse contributors under a reimbursement scheme for lower heating value gas suppliers during the reimbursement period (s 28(3)-(4)), subject to a 10 TJ/day supply threshold (s 28(2)). Maintain clear records of contributions and supply volumes.
Participate in PIA negotiations and default procedures. Be prepared to engage with the operator under the default regulatory formation procedure for PIAs (s 8(2)). Consider whether disputes over relevant effects should be referred to an expert or arbitrator under regulations (s 9).
Monitor regulatory instruments. Because regulations can modify contracts and prescribe measurement and enforcement rules (ss 14, 34), maintain an administrative process to track regulations, Gazetted notices (s 29) and Ministerial orders (s 32) affecting your operations.

For pipeline operators

Implement PIA negotiation processes and ensure compliance with s 7 content. Require PIAs to include explicit statements of relevant effects and the agreed mitigation (s 7(1)(e)). Use standard form agreements or the default PIA only where consistent with regulatory defaults (s 8(7)).
Prepare operational and measurement capacity to enforce allocation and flow reductions. Operators may reduce flow or allocation if a producer fails s 6(1) (s 6(3)); this requires operational and contractual mechanisms, appropriate metering and recordkeeping in line with regulations (s 34(2)(c)-(d)).
Use injunctions where appropriate. The Supreme Court may grant injunctions under s 12 to restrain or compel producer conduct. Operators should document non‑compliance and be prepared to seek interim relief.
Engage in dispute resolution design. Work with regulators and suppliers to develop arbitration and expert procedures in regulations (s 9). If your preferred technical determinations should be final and binding, advocate for expert determination regimes in the regulations (s 9(2)(b)).

For affected gas users and consumers

Determine eligibility for compensation or rectification. For Part 4 compensation, confirm whether you are a “gas consumer” that consumed at least one terajoule at a site in the prior 12 months and held a downstream agreement in force immediately before 1 January 2009 (s 17(2), (4)). For rectification, confirm if you are a small “consumer” (≤0.18 TJ/year) under s 22 and whether your installations are “relevant consumer installations” per s 23(1).
Preserve evidence of consumption, downstream agreements and losses. Compensation is limited to direct costs attributable to non‑complying gas (s 16(3), s 17(3)); accurate records tying losses to quality changes are essential.
Participate in regulatory and consultative processes. The Minister must consult before amending reference or standard specifications (s 3(2)) and must make proposed orders available for comment when granting exemptions (s 32(2)). Engage early to protect user interests.

For regulators/administrators (Minister, Director, Authority)

Design and publish regulations early. Because many substantive elements rely on regulations (s 34), prioritise rules on PIA declaration criteria and procedures (s 5(2)), default PIA terms and formation processes (s 8), dispute resolution and expert determinations (s 9), measurement standards (s 34(2)(c)-(d)), compensation scheme parameters (ss 11, 16) and contract modification mechanics (s 14).
Establish the rectification programme and Account governance. The Director must establish and implement the rectification programme (s 23). Ensure Account financial administration complies with the Financial Management Act 2006 and Auditor General Act 2006 rules as applied (s 26), and prepare the required annual reporting (s 27).
Set clear procedures for reimbursement and recovery. If a reimbursement scheme is implemented, clearly define contributor status, supplier thresholds, the Authority’s role, methods for calculating reimbursement amounts, interest on unpaid amounts, and recovery mechanisms (s 28(3)-(5)).
Publish Gazetted notices and consult. Exercise the Minister’s consultation duties before changing reference or standard specifications (s 3(2)) and before exempting persons or activities (s 32(2)). When determining the reimbursement period start date, notify stakeholders via Gazette (s 29).

Cross‑role operational steps and recordkeeping

Measurement and metering. All parties should ensure meters and quality measurement devices conform to any standards prescribed by regulation, and that chain of custody and calibration records are maintained given evidentiary consequences (s 34(2)(c)-(d)).
Contractual audit and alignment. Review existing gas contracts and pipeline services agreements to understand how s 14 and s 19 may affect contractual rights; consider renegotiation in light of potential regulatory modifications.
Documentation for causation. For compensation or reimbursement claims, maintain contemporaneous operational records demonstrating how capacity, operations, maintenance, or plant and equipment costs are attributable to receipt of non‑complying gas (ss 7(2), 16(3), 17(3), 18(4)).
Engage experts early. The Act contemplates technical expert determinations. Parties should budget for independent technical advice and consider joint appointment of experts where possible to limit disputes.
Monitor timelines and transitional rules. Be mindful of the 18‑month PIA effect lag (s 6(2)), the reimbursement period (s 22(1)), and the consumer compensation cutoff (s 17(5)). Track Gazette notices and regulatory instruments to align operational plans.

In sum, compliance under the Act requires a combination of legal, commercial and technical actions: legal review of contracts and entitlements, proactive negotiation and documentation of PIAs, operational readiness for flow/allocation changes, financial planning for Account contributions and potential reimbursements, and active engagement with regulators when rules and determinations are made. The central compliance hinge is the form and content of the regulations and Ministerial instruments that operationalise the Act’s architecture.

Deep Dive

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