✨ Gas Information Disclosure
1876 NEW ZEALAND GAZETTE, No. 80 8 JUNE 2011
Disclosure under the Gas (Information Disclosure) Regulations 1997
Maui Development Limited
May 2011
2. REGULATIONS 15 AND 16: FINANCIAL AND EFFICIENCY PERFORMANCE
2.1 Definition of Maui Pipeline Notional Entity
The Maui pipeline is owned by the Maui Mining Companies (an unincorporated joint venture). As the joint venture’s services company, Maui Development Limited holds the pipeline assets as a bare nominee. Given this ownership situation, the best and most practical method of calculating the financial performance and efficiency measures was to calculate stand-alone accounts for the Maui pipeline business and derive the measures required from them.
The Maui Pipeline notional accounts were constructed as follows:
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Income was derived from the tariff income for shipments through the pipeline.
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Expenses were derived from the expenses charged by the Commercial, Technical and System Operators, including the cost of services provided to them, together with the expenses charged by the Balancing Agent and the Incentives Pool Trustee who operate under the terms of the MPOC. These were all considered to be pipeline related.
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Assets include any assets owned by MDL and used for pipeline related purposes, but also include the estimated ODRC value of the Maui pipeline assets.
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Depreciation is charged on the MDL assets and the pipeline ODRC values. The depreciation charge for the pipeline and other pipeline assets is based on that determined by the most recent ODRC valuation report.
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Currently in the notional accounts tax is charged at the normal company rate. This is assumed to be equal to the “Cash Tax” amount used for the purposes of calculating the accounting rate of profit. A corresponding tax payable is recognised in the balance sheet for the notional amount. No actual liability exists and the resulting cumulative balance is not required to be repaid. Given this, tax payable balances are reversed out through retained earnings in the subsequent period.
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The notional entity has no debt. Any debt held in the individual Maui Mining Companies is unable to be directly or indirectly attributed to the Maui pipeline.
The notional accounts do not include provision for the following costs:
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Costs associated with the governance of Maui Development Limited’s pipeline business by the Maui Mining Companies. These governance services are currently provided at no charge. These costs are unlikely to significantly affect the results given below.
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Costs associated with the provision of Balancing Gas services for the Maui pipeline before December 2008. Before this time the Balancing Gas service was provided principally by the Maui Mining Companies at no charge to Maui Pipeline users. MPOC legacy provisions were removed in early December 2008 and MDL now recovers balancing gas costs from Maui Pipeline users. The new arrangements are still evolving although in 2009 and 2010, MDL cost recovery mechanisms calculated full cost recovery with a significant reduction in the use of balancing gas with usage by volume at less than half of 2008 levels. Balancing Gas costs are included in the 2010 notional accounts.
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