The launch Apr. 7 took place a year after the AEMO established Australia’s first voluntary gas supply hub in Wallumbilla near Roma in Queensland.
The Wallumbilla end-of-day benchmark price will be used as the reference price for the ASX’s new gas futures contract.
The new market will help gas industry participants to manage their forward price risk and also will provide greater price transparency. Matt Zema, AEMO managing director, said the establishment of the new market in gas futures is an important step towards competition in Australia’s growing eastern and south-eastern gas markets.
The benchmark price can be used as a basis price for gas contracts and the development of a derivatives market will provide a risk management tool for forward pricing and planning.
The AEMO has held regular consultations with industry to refine its benchmark price methodology so that it is in keeping with industry needs and expectations.