Gas is a vital energy source for Queensland's industrial and manufacturing sectors and will play a significant role in the state's continued economic and regional development. It is also used in electricity generation.
In 2014, Queensland's domestic gas demand was approximately 280 petajoules. Our gas customer base is dominated by large industrial and mining operations (around 70 per cent of Queensland demand). There are approximately 187,000 residential customers who use gas primarily for cooking and hot water.
The Short Term Trading Market (STTM) is a day-ahead wholesale market for natural gas, which links transmission pipelines and distribution systems. The STTM operates at selected demand hubs, currently located in Brisbane, Sydney and Adelaide. The hubs are transfer points through which gas is transmitted and then delivered to the distribution networks.
The STTM provides price transparency and helps balance supply and demand variations. Market participants include energy retailers, power generators and other large gas users.
The Australian Energy Market Operator (AEMO) operates the STTM, which was designed to enhance gas market transparency and competition by setting prices based on supply and demand conditions.
As part of the Australian Government's energy market reform program, a gas supply hub at Wallumbilla commenced in March 2014. The hub is a pipeline interconnection point for the Surat–Bowen Basin, linking gas markets in Queensland, South Australia, NSW and Victoria.
The new voluntary market responds to emerging challenges in the east coast gas markets. Queensland in particular is experiencing substantial developments in liquefied natural gas (LNG) exports, which has increased the need for more flexible and transparent upstream transactions between parties.
The hub promotes transparent and efficient gas trading, allowing participants to manage the risks associated with variable gas prices. It also deepens market liquidity by attracting participants such as LNG plants, industrial customers and gas-powered generators. The diversity of contract positions and the number of participants at Wallumbilla create a natural point of trade.