The Australian Energy Regulator (AER) has published its final decision to classify the Kurri Kurri Lateral Pipeline (KKLP) as a transmission pipeline.
This is the AER’s first pipeline classification decision since reforms were introduced to the regulatory framework for gas pipelines in March 2023.
We consider that the pipeline’s characteristics are consistent with that of a transmission pipeline and that its primary function is to convey gas to a market.
In making this final decision, we have considered stakeholder feedback, the National Gas Objective and the pipeline classification criteria set out in section 13 of the National Gas Law.
The criteria require us to consider the pipeline’s primary function and factors such as the pipeline’s diameter, pressure, injection points, area served, configuration and jurisdictional licence.
Background
The KKLP is a pipeline that connects the Hunter Power Project at Kurri Kurri in NSW to the Sydney to Newcastle Pipeline near Newcastle. The KKLP is currently being commissioned. It is owned and operated by APA Group.
All scheme and non-scheme pipelines must be either classified as a transmission or distribution pipeline.
Following gas pipeline regulatory reforms in March 2023, the AER is responsible for classifying pipelines that are not yet classified and making pipeline reclassification decisions.
Transmission and distribution pipelines have similar regulatory obligations under the National Gas Law and National Gas Rules. However, a transmission pipeline classification means that the pipeline must also report information on AEMO’s Gas Bulletin Board and the Short-Term Trading Market, a wholesale gas market operated by AEMO. Distribution pipelines do not need to report this information.
More information on the AER’s classification and reclassification powers can be found in the AER’s Pipeline Regulatory Determinations and Elections Guide.