Question

Is it appropriate to think of all of Australia as a single geographic market for natural gas? If so explain why. If not how would you define the relevant geographic markets?

Answer 1

For each product market in wherein merging firms participate, the Agency will decide the geographic market in which the firms sell or produce. It will be appropriate to think of all of Australia as a single geographic market for natural gas because the nationwide wholesale market for gas does not prevails in Australia. There are two different producers of natural gas in Australia which include: Santos and Sagasco, thus reveals that the production process and selling to final consumers is by different firms, not just one single geographic market.

Australia has segmented the natural gas production into regions like the southern region that carries the Moomba plant. The relevant geographic markets would be wherein the Cooper basin is located; and the territories which with gas that are included in Queensland, South Australia, and New South Wales. Another geographic market would be the Northern Territory wherein the Amadeus basin was located. Another geographic market would be in Queensland which wherein the Surat-Bowen basin is located.