Commerce Commission issues final determination on Maui Gas Pipeline Open Access
The Commerce Commission has today issued the final determination in relation to an application under section 58 of the
Commerce Act by two Todd companies in relation to access to the Maui gas pipeline. This is consistent with the
Commission's preliminary view stated in its April draft determination.
The application by Todd Petroleum Mining/Todd Taranaki (Todd) related to certain provisions of the Maui Pipeline
Operating Code (MPOC) under which open access to the Maui gas pipeline occurs. Pipeline users who wish to gain access to
the pipeline must enter into contracts with its owner, Maui Developments, which contain provisions that are based on the
MPOC.
Ms Rebstock noted that the Commission is responsible for deciding whether to authorise Todd's application. The
Commission must first determine whether competition would be lessened by the relevant provisions. If so, the Commission
then compares any benefits to the public from the provisions with the detriment arising. If the benefits exceed the
detriments, the Commission will grant authorisation.
However, in this case, the Commission's final determination is that there would be no lessening of competition if the
relevant provisions were implemented. That is because, in the Commission's view, if the provisions in the MPOC were not
implemented by the industry, it was likely that the Government, as noted in policy statements on the gas industry, would
regulate the implementation of identical provisions to those in the MPOC. Hence the hypothetical position with and
without the MPOC provisions would be the same and there would be no lessening of competition when the two were compared.
In such a case there is no need for the Commission to compare the benefits with the detriments.
The Commission has therefore determined that authorisation of the relevant provisions in the MPOC is neither required
nor is within the Commission's jurisdiction. As a result it has declined to authorise the provisions.
A copy of the final determination is available on the Commission's website www.comcom.govt.nz under PublicRegisters /
Anti-Competitive Practices - Authorisations
Background Maui Pipeline Operating Code (MPOC) is a set of rules that regulate open access to the Maui pipeline by
producers and shippers of gas. The Maui pipeline transmits gas produced in various gas fields in Taranaki to markets in
Auckland, the Waikato, the Bay of Plenty and Gisborne.
Todd's application was concerned with the provisions in the MPOC that: - preserve the existing long-standing
rights of the parties to the sale, purchase and delivery of Maui gas; and - permit the implementation of a specialised
operational gas balancing system for New Zealand's gas transmission pipelines. The balancing system is necessary to
reconcile quantities and values of gas injected into a pipeline system by producers with that extracted by consumers.
ENDS