Still swings and roundabouts

AT FIRST glance, the final gas access decision on the Dampier-Bunbury gas pipeline appeared to represent a swing in favour of owner Epic Energy, compared with the draft decision contested last year in WA’s Supreme Court.

Epic acknowledged it as an improvement from the draft decision. But it did not “take the company near the position for which it filed”, Epic general manager commercial and project development Ian MacGillivray said.

“The champagne remains uncorked,” he said.

OffGAR executive director Peter Kolf described the decision as “between both ends of the spectrum”.

“It’s not as much as what Epic wanted, but a lot more than what a lot of (pipeline) users had made submissions on,” Mr Kolf said.

Regulator Ken Michael had set out to achieve the best outcome, taking into account all the objectives set for him within legislation, he said.

Matters Mr Michael included in his overall consideration included the commercial circumstances at the time of the 1998 sale of the pipeline, the background to Epic’s purchase, Epic’s financial viability, and submissions from pipeline users, Epic and other stakeholders.

OffGAR would provide briefings and meet with those wishing to better understand the ruling, he confirmed.

Mr Kolf said the necessary information to calculate the figures in the final decision was actually contained within the published decision.

“It is an extremely complicated area,” he said.

“We have supplied models in the past, but not on the day of the decision. This time the financial model contains confidential information but we will make generally available all the information necessary.”

Epic will welcome the chance to discuss the decision with OffGAR.

Mr MacGillivray said the company had taken plenty of calls from its owners and bankers, all understandably keen to understand the company’s position.

But it could not enter into formal discussions until it could offer a detailed view on how far away the new decision might be from where the company needs to be.

“We are not in a position to determine viability and development,” Mr MacGillivray said.

“We are forming a view, but need to take all the time available. We are cautious about flagging what that will be.”

Mr MacGillivray said Epic was asking for clarification from the regulator.

“We urgently need to understand the derivation of his average tariff,” he said.

By law the company must also get back to the regulator by July 4 with a revision of its original access arrangement.

The regulator would then review this to see if it had taken into account the 47 amendments required by the final decision.

If Epic found it could not conform to the amendments, it could go to the State’s gas board, requesting the decision be reviewed.

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