Santos Ltd
A.B.N. 80 007 550 923
Level 14 Santos House
60 Edward Street
Brisbane  Qld  4000
GPO Box 1010
Brisbane  Qld  4001
Telephone:	(07)  3228 6666
Facsimile:	(07)  3228 6999

REF:	N:\PIPELINE\BMIP\010201_acccSubmission lcl.doc
FILE:	15.56.5.4, 15.12.2

2 February, 2001

Ms Kanwaljit Kaur
Acting General Manager
Regulatory Affairs - Gas
Australian Competition & Consumer Commission
PO Box 1199
DICKSON  ACT  2602	By Fax: (02) 6243 1205

Dear Madam,
Santos Submission – Ballera to Mount Isa Pipeline Access Arrangement
I refer to your request for submissions on the Ballera to Mount Isa (BMIP) Access Arrangements.  Santos is an 18% participant in the BMIP Joint Venture.  It is also a significant user of BMIP transportation services, and the transportation agreement between the BMIP and the South West Queensland Gas Producers underpinned the construction of this pipeline. 
Santos has previously provided a submission on the Roma to Brisbane Pipeline’s Access Arrangements.  Many of the issues/recommendations raised in that submission are relevant to all transmission pipelines including the BMIP Access Arrangements, viz:
•	Trading practices and competition issues.
•	Extension/expansion policy.
1)	Trading Practices and Competition Issues
A competitive trading policy must provide current and new shippers the ability to:
•	Receive gas through any producer inlet run, which supports the principle of shippers being able to receive gas from multiple sources of production.
•	Undertake linepack transfers between any shipper in the BMIP, without consent being required.
•	Automatically deliver gas to any delivery point while the shipper is within its MDQ, provided it does not put at risk other shipper deliveries.
•	Follow an agreed mechanism, which permits shippers to incorporate additional receipt and delivery points under their GTA, including those cases where the revised transportation route is increased.
The Service Provider should not impose charges for use of additional receipt points, or restrict a shipper’s utilisation of its full MDQ capacity.  To encourage free and open access, it is crucial that a mechanism is put in place to protect against any of these possible scenarios.  It is inappropriate for the Service Provider to be the sole adjudicator of “reasonable commercial grounds” on trading issues, especially where the Service Provider’s return may be maximised by refusing a shipper’s trading request.
Section 3 of Santos’ RBP submission proposes mechanisms to address the above trading and competition issues.
2)	Extensions/Expansion Policy
Under the Service Provider’s Access Arrangements and Pipeline Licence with the Queensland Government, the Service Provider is obligated to pay for additional compression expansion as required by the market.  Santos supports expansion of the BMIP, when users are prepared to commit for firm capacity arrangements.
The current tariff arrangement has been developed such that the cost of additional compression capacity is borne by the Service Provider. Accordingly, the Service Provider is obligated to install additional capacity when the shippers have contracted capacity on a firm basis, which exceeds the current capacity of the pipeline.  This is understood to be consistent with the practice in the Roma to Brisbane Pipeline.  The Service Provider should not be able to rely on its own market view as to the timing of additional capacity, independent of what customers have contracted on a firm basis.  A clear mechanism is required which triggers compression expansion once the combined MDQ of all shippers exceeds the capacity of the pipeline.
Furthermore, as the cost of compression is intended to be reflected in the current tariff arrangements, it would be inappropriate for the Service Provider to seek additional capital contributions from shippers in relation to that service.  

Santos desires that the BMIP be an open and competitive pipeline.  Santos supports that through consultation with all relevant parties including the ACCC,  areas of deficiency in the Service Provider’s Access Arrangement are identified.  A clear framework can then be developed to foster a dynamic and open access trading environment in the BMIP, for the benefit of all gas consumers in North West Queensland.
Yours sincerely,

Rod Rayner
Manager Commercial

cc:	Peter Wilson
T C Lutton	Delhi Petroleum Pty Ltd
J Rodda	Origin Energy Resources Ltd/
Oil Company of Australia Ltd
R A Rayner	Vamgas Pty Ltd/Santos Petroleum Pty Ltd
Santos Australian Hydrocarbons Pty Ltd