The ACCC says gas from the Dampier to Bunbury pipeline is a competitive constraint.

ACCC approves Quadrant takeover

Friday, 16 November, 2018 - 14:57
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The competition watchdog has cleared the planned $2.9 billion Santos takeover of Quadrant Energy despite concerns from some businesses in the Goldfields region about reduced competition for gas supplies.

Australian Competition and Consumer Commission chair Rod Sims said it had decided not to oppose the acquisition.

“The ACCC considers that a combined Santos/Quadrant will continue to face strong competition from a range of suppliers, including large LNG producers such as Chevron and Woodside,” he said.

“Most market participants believe the Western Australian domestic gas market is currently oversupplied.

“While the demand-supply balance could tighten in future, the ACCC considers that the proposed acquisition will not have a significant impact on future gas prices.

“In WA, gas exporters are required to reserve 15 per cent of their gas for the domestic market, so this should ensure that gas available for domestic customers continues to grow, and from a range of players.”

However, the ACCC said there had been some concerns raised regarding the takeover.

“The ACCC considered concerns from a small number of market participants that Santos and Quadrant (supplying from Varanus Island) are particularly close competitors for customers on the Goldfields Gas Pipeline, as gas from the Dampier to Bunbury pipeline coming through the interconnector may be less competitive,” the commission said.

“The ACCC concluded that gas from the Dampier to Bunbury pipeline would still act as a sufficient competitive constraint.

“The ACCC also considered whether Santos taking full ownership and operating the Devil Creek and Varanus Island domgas plants was likely to substantially lessen competition for the supply of domgas processing services to third parties.”

Meanwhile, APA Group has announced a $45 million contract extension to supply gas to an unnamed WA gold miner in the Goldfields region.

The contract extension will support APA’s expansion of its Murrin Murrin Lateral pipeline, which is a part of the Goldfields gas pipeline.

“Over a number of years now, APA has invested significant amounts of capital in building our WA assets in order to provide a reliable and safe energy delivery platform for our mining customers,” APA managing director Mick McCormack said.

“Continuing to invest in our asset footprint to enable more certainty and growth opportunities for our customers is very satisfying as an infrastructure owner and operator.

“We have been working closely with all of our customers to provide cost effective services and the flexibility required to help them with their energy needs.

“We continue to look at ways of adding value to the services we provide to our customers to help them optimise their energy needs.”  

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