Pipeline suspension, decommissioning and abandonment

1. Do you have any concerns or foresee any issues with the proposed clarified gas network suspension or abandonment definitions and their requirements? If yes, which definition and/or requirement specifically and why?

2. Do you have any concerns or suggested inclusions for the proposed content requirements outlined for gas network Suspension or Abandonment Plans?

3. Are there specific concerns or considerations regarding the lead time requirements for each stage of the process to surrender or abandon a network and/or surrender a licence?

4. Are there any other aspects and practical considerations of suspension or abandonment of gas networks you believe should be addressed?

APGA is concerned that these amendments have been drafted with insufficient consultation with industry, specifically the operators of gas distribution infrastructure. The drafting reflects a fundamental lack of understanding of the issues involved with suspension and abandonment of this infrastructure, a lack of technical expertise and even familiarity with industry terms.

The definition of ‘suspend’ and ‘abandon’ does not appear to accord with industry usage and as drafted in the regulations, may capture otherwise business as usual activities. This obviously presents a large compliance risk, and one which could have been mitigated through closer consultation with industry on a definition of these terms and where the regulations should apply.

Closer consultation with industry prior to the drafting of these regulations would also have revealed that the relevant Australian Standards (AS 4645 and AS 2885) already encompass the necessary technical specifications and best practice for disconnection and abandonment procedures. Where there are deficiencies in the current standards, there is an established process in place for augmenting standards which then applies across jurisdictions.

For example in the draft regulations:

·        26C(1) uses the terms ‘district regulator’ and ‘mainline isolation valve’ without specific definition. This introduces a materiality issue, where any part of the network downstream of these items could be included, even small and relatively inconsequential items such as a customer inlet service. The disconnection of any customer service, or any rehabilitation or repair works that led to the ‘abandonment’ of a segment of a main could, under this reading, require an Abandonment Plan lodged and accepted at least six months prior to the works.

·        26E duplicates an existing requirement under the National Energy Laws for a network operator to operate the gas network continuously – with the apparent intent of establish a positive obligation to operate only to support penalty provisions for the failure to comply.

·        26H(2)(e) assumes that sites need to be remediated and that there will be contamination, presumably beyond what is already covered under Contaminated Land Management Act 1997 and regulated by the EPA. For the most part, disused gas assets do not need to be physically removed and can be safely left in situ. Nonetheless 26L provides for the Minister or Department to direct an operator to amend their abandonment plan – which could feasibly result in directions to remove and remediate infrastructure, and hence considerable and unaccounted for cost for the operator. The development of a remediation plan would also require the operator to seek landowner consent for site access and proposed remediation activities, conduct contamination studies, and seek permits from relevant authorities – all of which require time and resources to conduct.

·        26G(4) and 26G(5) give the Secretary the power to require amendments, change a suspension plan to an abandonment plan, and direct removal of parts of the network, without necessarily consultation with the operator. This is a considerable regulatory overstep which could effectively enforce an entity to prematurely abandon an asset and accelerate stranded asset risk.

·        26I(1) and 26I(4)(b) similarly give the Secretary the power to direct an amendment or refuse to approve an amendment, seemingly without a requirement to consult with the operator. This should be specifically and explicitly limited to circumstances where the Secretary reasonably believes that an amendment does not adequately address health and safety risks.

·        The definitions of ‘suspend’ and ‘abandon’ in the drafted regulations is extremely narrow, does not necessarily accord with industry use for gas networks, and does not contemplate future use of network assets for other purposes.

The obligations between operators and regulators are unequal. Where operators have strict timeframes under the suspension and abandonment regulations, under threat of penalty, the regulator has no legislated timeframes in which to respond. A lack of certainty around regulator timeframes risks operators not being able to plan for, and hence resource, suspension or abandonment processes.

Further, APGA observes that other jurisdictions are contemplating similar frameworks for gas infrastructure, more or less simultaneously. A lack of coordination with other jurisdictions facing the same issues may lead to regulatory inconsistency between jurisdictions, and to inconsistently good outcomes for both operators and the general public. A coordinated approach should be contemplated before these amendments are further pursued.

Finally, APGA notes that the proposed amendments to the Gas Supply (Safety and Network Management) Regulation 2022 do not include an amendment to Part 4 Natural gas standards – 27 Definitions. Under the current regulations, compliant natural gas means natural gas that complies with the standards set out in the Australian Standard entitled AS 4564:2020, General purpose natural gas. This was superseded in June to AS 4564:2025,[1] which expands coverage of natural gas to natural gas equivalents, including hydrogen and biomethane.

5. We are seeking your feedback on the proposed amendments to penalty units. Are the penalty amendments appropriate? If not, which penalty/ies specifically do you regard as ineffective and why? In your feedback, please ensure you cite which section of the Gas Supply Regulation the penalty relates to.

6. Of the proposed continuing offences and their penalties, are these appropriate? If not, which provision/s specifically and why?

APGA supports the intent of modernising and streamlining the penalty regime. However, some new penalties are significant and should be subject to a good faith defence, especially where there is no consultative framework attached to may of the new regulations.

In some cases the new penalties and penalty units are excessive:

·        26A: Even minor and inconsequential service interruptions to support time-sensitive maintenance are subject to new penalties which are disproportionate relative to the offence.

·        28 (and 29, 32, 34 35): The new penalties are excessive especially where the substantive legislation does not reflect the current standard (AS 4564:2025 instead of AS 4564:2020). It is not apparent that DCCEEW intends to pursue amendment of this in the Regulations

APGA notes the substantive section 12, relating to venting or flaring, provides that written notice must be given within 28 days after the venting or flaring is carried out.

7. We are also seeking your feedback on the proposed new offences and maximum penalties for suspension and abandonment requirements in section 5 of this consultation paper. Are the offences and maximum penalties appropriate?

The entirety of the proposed Part 3A is not currently fit for purpose as drafted. This includes the penalty regime which takes a punitive rather than consultative approach to addressing breaches.

8. We are seeking your feedback on the proposed new provisions for the Gas Supply Regulation, with related offences and penalties. Are the provisions, offences and penalties appropriate? If not, which provision/s specifically and why? In your feedback, please ensure you cite the relevant provision of the Gas Supply Regulation.

Generally agree with new provisions, with some exceptions:

·        12A does not appear to appreciate that varied pressure in networks is normal operations and can change across a range of temporal thresholds, from daily to seasonally. There can be many reasons why this would be the case, including repairs and maintenance, or emergency access requirements. APGA does not understand the intent behind this provision, and considers the penalties applying to 12 and 12A disproportionately large.

It also does not allow for force majeure events which might require a change in operating pressures 28 days prior to the change. This provision may result in an increase of costs to customers where a distribution network operator must proactively mitigate penalty costs for a provision with which it cannot reasonably comply.

By way of recent example in transmission pipelines, flooding in the vicinity of the Moomba to Adelaide Pipeline System required operating pressures to be abruptly and significantly reduced for an extended period of time. This situation is clearly not envisaged by the legislation, and had the operator of the MAPS been subject to it they would not have been able to comply.

9. Do you believe that a proposed 10% amount for PINs offences is appropriate?

10. Do you believe other offences should be added to this list of PINs offences? In your feedback, please ensure you cite the relevant PINs offence of the Gas Supply Act or Regulation that your feedback relates to.

Yes, the 10% proposed is appropriate, and PIN offences should also be contemplated for 7(4), 9, 12(1), 12A, and 19(1).