All links in the physical supply chain contribute to providing gas users with a secure and reliable gas supply. The security and reliability (S&R) of transmission pipelines are particularly important, given that a transmission outage has the potential to cause widespread supply interruptions. For example, the cost to the New Zealand economy of a gas transmission interruption that took place in October 2011, when the Maui pipeline failed due to a landslide at Pukearuhe in northern Taranaki, was estimated by the Ministry of Business Innovation and Employment to be $200 million. That event prompted pipeline owners and operators to re-assess risks, increase monitoring, and invest in additional preventative maintenance at high risk sites.
The introduction of new information disclosure requirements in 2012, as an element of a price-quality regime administered by the Commerce Commission under the Commerce Act, greatly improved the transparency of S&R. In particular, the owners of open access transmission pipelines were required to publish their Asset Management Plans (AMPs). However, stakeholders found the information difficult to understand, and concerns about transmission pipeline S&R remained. This prompted Gas Industry Co to review the factors influencing S&R and assess their adequacy. We published our findings in the 2016 Security and Reliability Issues Paper and followed this up in 2017 with a Security and Reliability Update Paper. Links to these papers can be found in the Background section.
More recently, the Commerce Commission published a report it commissioned on how First Gas manages geotechnical risks to the gas transmission network. It also published a report into the broader risk management practices of gas pipeline businesses subject to price-quality regulation. There reports are briefly described in the Current Arrangements section.