Wesfarmers Chemicals, Energy and Fertilisers will divest parts of its Kleenheat business, including EVOL LNG, but will keep its natural gas retailing service and Kwinana facilities.
Wesfarmers Chemicals, Energy and Fertilisers will divest parts of its Kleenheat business, including EVOL LNG, but will keep its natural gas retailing service and Kwinana facilities.
WesCEF has struck deals sell Kleenheat’s LPG distribution business to Supagas, the nation’s third-largest LPG supplier, and will move its EVOL LNG brand onto Clean Energy Fuels Australia.
Supagas will acquire four Kleenheat-branded metropolitan sites and six regional sites as part of the deal, which will grow its WA presence as it seeks to expand into the LPG market.
CEFA, which offers fuel solutions for remote, off-grid mines and industrial applications and is developing renewables to complement LNG, will pick up EVOL as part of its ambition to grow an energy transition platform in Australia.
WesCEF will retain its Kleenheat natural gas retailing business, which supplies residential and commercial customers in Geraldton and Bunbury.
It will also keep its LPG and LNG production facility at Kwinana and retain the Kleenheat brand.
The Kwinana gas plant will continue to sell wholesale LPG to Supagas and other LPG distributors in the WA market, and will supply LNG under contract to CEFA.
The value of the deals has not been disclosed.
WesCEF managing director Ian Hansen said the deal was in the best interests of Wesfarmers shareholders.
“A key factor in our decision to sell was the new owners’ commitment to invest in the future of the distribution businesses, which will see them continue to grow and succeed,” he said.
“The sale also gives employees and customers of the LNG and LPG distribution businesses the opportunity to become part of growing gas businesses that have access to new markets and technologies and will benefit commercially from economies of scale.
“Both prospective owners recognise the strengths of our LPG and LNG distribution networks and our people.
“Potentially, there are 160 people transferring across to the new owners, and the new owners are excited and very keen to take the teams – and the businesses – forward to bolster their respective offerings.”
Wesfarmers has owned the LPG business for 65 years, and the LNG distribution business for 20 years.
CEFA is owned by Miami-based I Squared Capital.
Supagas is owned by Japan-based Taiyo Nippon Sanso Corporation – the world’s fourth-largest supplier of industrial, electronic and medical gases.
Nippon Sanso said Supagas was building on its core business of supplying LPG, by moving into the supply of industrial gases and other products.
It has 48 offices and over 200 retail outlets in New South Wales and Queensland and has been aiming to acquire an established sales network in northern and western Australia and expand its sales channels.
“The recent proposal from Wesfarmers for the sale of Kleenheat's assets matches Supagas' business expansion plans, which led to the conclusion of this agreement,” it said in a statement.
It expects to realise synergies not only with LPG but also with its existing industrial gas business and achieve a sustainable boost in profitability.
The Supagas transaction is expected to be completed in September 2024, with the LNG sale slated for November.
