On 16 October 2026, we published our draft decision to grant Australian Gas Networks Limited (AGN) five-year exemptions from the gas ring-fencing obligations in sections 139 and 140 of the National Gas Law (NGL) for its Hydrogen Park South Australia (HyP SA) and Hydrogen Park Gladstone (HyP Gladstone) hydrogen trial projects.
Both projects produce renewable hydrogen that is blended with natural gas and supplied through distribution networks to customers in Adelaide (South Australia) and Gladstone (Queensland).
Under our draft decision, the exemptions will commence on 30 November 2026, when the projects’ existing deemed exemptions under Part 2 of Schedule 7 to the National Gas Rules (NGR) expire, and remain in effect until 30 November 2031.
Under the exemptions, AGN would be required to notify the AER within 15 business days of:
- a material change in the nature or scale of either project
- a formal third-party request to connect or access the Gladstone or Tonsley distribution networks for a renewable gas production facility
- any material change to its internal controls relevant to either project, including controls that substantially replicate the associate contract requirements, and provide updated documentation of those controls.
These proposed conditions are intended to keep the AER informed of material changes relevant to the exemptions and are additional to AGN's existing notification obligations under rule 34(6) of the NGR.
Background
The ring-fencing framework for gas pipeline service providers is set out in Part 2 of Chapter 4 of the NGL. The ring-fencing framework requires service providers to separate gas pipeline services from related businesses. The requirements are intended to prevent a related business from gaining a competitive advantage through its common ownership or operation of a pipeline, including through favourable access or pricing.
The NGR allows service providers to seek exemptions where the relevant pipeline is not significant, the costs of complying with the requirements outweigh the resulting public benefit, and appropriate internal controls are in place.
Learn more about ring-fencing
The AER has published a Compliance bulletin – new obligations on gas pipeline, compression and storage service providers and a Gas ring-fencing decision guide.