Australian competition watchdog, the Australian Competition and Consumer Commission (ACCC), is looking to put an end to a marketing joint venture between ExxonMobil and BHP Billiton in order to boost competition in the Australian gas market.

The Federal Government has released the report of the Australian Competition and Consumer Commission Inquiry into the competitiveness of wholesale gas prices in eastern and southern Australia.

“There has been unprecedented change in the east coast gas market over the last four years with the development of Liquefied Natural Gas (LNG) facilities in Queensland. These changes have created winners and losers, and industrial gas users in particular have been acutely affected by the transition,” ACCC Chairman Rod Sims said.

“The triple whammy of the introduction of LNG and with it exposure to international gas pricing, a fall in oil prices leading to a downturn in exploration and new development, and regulatory uncertainty and exploration moratoria, has created an increasingly complex environment for many gas market participants.”

The ACCC said it would also further consider some practices in the market, including the joint marketing of the Gippsland Basin Joint Venture between Esso and BHP Billiton.

“While market conditions have been difficult, it is important that new supply comes online and that new opportunities are developed. Trading markets are developing and the Australian Energy Market Commission and the Australian Energy Market Operator are working towards further improvements in market design. More supply, new suppliers and an increased diversity of supply sources are crucial for the future competitiveness of, and pricing in, the gas market,” Sims said.

According to Reuters, both companies are fighting this move by the competition watchdog and ExxonMobil stated that separate marketing would increase costs.

The news agency quoted ExxonMobil as saying: “Any unwinding of joint marketing will only increase those costs in the short term and make it more difficult to invest and bring on new supplies in Gippsland.”

Reuters also reported BHP’s point of view and the company said the joint venture had served the market well and was still meeting the market’s needs.