8. Revenue continued 8.1 Revenue from contracts with customers continued
Gas trading sales
Gas trading sales comprises predominantly three revenue streams: sale of natural gas, and distribution and sale of LPG.
Revenue streams
Satisfaction of performance obligation
Sale of natural gas
The group receives revenue from business customers for providing a supply of natural gas over a contracted time period.
Revenue is recognised over time that corresponds with the customer’s consumption of natural gas and measured at the transaction price of the contract. The transaction price for a gas supply contract includes variable consideration in the form of indexed pricing, volume pricing, and take or pay arrangements. The group estimates the amount of variable consideration present in each contract using the expected value method. Customers are billed monthly. A contract asset is recognised to account for natural gas supplied but not billed to the customer at balance date. Revenue is recognised at a point in time when LPG is delivered to a customer’s site. Billing to a customer occurs after completion of deliveries and at the end of each month with payment terms ranging from 60 days to 90 days. Revenue is recognised over time in line with a customer’s consumption of monthly tolling and storage volumes and measured at the transaction price of the contract. The transaction price for a monthly tolling and storage contract includes variable consideration in the form of volume pricing and take or pay arrangements. The group estimates the amount of variable consideration present in each contract using the expected value method.
Sale of LPG
Sale of LPG comprises bulk LPG sales to commercial customers and bottled LPG sales to both commercial and residential customers.
Distribution of LPG
The group provides services in the areas of bulk LPG storage, distribution and management.
Other revenue streams
Other revenue includes telecommunications revenue and revenue from providing energy solution services. Telecommunications revenue from commercial customers comprise the sale of fibre services. Revenue is recognised at the point in time of supply and customer consumption. Energy solutions services comprise predominantly the sale of home and commercial ventilation and solar services. Revenue is recognised over time, reflecting the percentage completion of each ventilation and solar system install.
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Vector Annual Report 2023
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