1. Frameworks for considering longer-term options
Presentation to PEA
James Mellsop
Director
4 December 2012

2. Integration of gas transmission and energy
Increasing integration
Vector/Maui - Independent of energy trading
STTM - Energy trading can override transmission contracts - Hub pricing
Victoria - Energy trading determines pipeline carriage - Nodal pricing

3. Gas network complexity
At simplistic level, we can think of gas network “complexity” along two dimensions
Physical/network complexity
Number of injection/withdrawal points
The degree of “mesh”, not necessarily the number of “pipelines”
Supply/demand dynamics
Does the value of injecting/withdrawing at different points vary over time?
However, complexity is not a “binding factor” when there is no congestion

4. Vector, Maui and Victoria
Annual withdrawals
120PJ
113.6PJ
230PJ
Injection points 8 6 9
Withdrawal points
>130 18
>120
Length
2,287km
307km
~2,000km
Major pipelines 1 5

5. Complexity compass Physical/Network Supply/Demand More complex
Victoria (?)
Supply/Demand
Vector (?)
Maui (?)
Less complex

6. Capacity regime versus complexity
Contract carriage
Common carriage
Market carriage
Less complex
More complex

7. Name James Mellsop NERA—Auckland +64 9 928 3290 James.Mellsop@nera.com
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Name
James Mellsop
NERA—Auckland
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