The ACCC has decided not to oppose Santos Limited’s (ASX: STO) proposed acquisition of Quadrant Energy Holdings Pty Ltd.
Santos and Quadrant are active in the production and supply of natural gas (and related condensate by-products) and crude oil in Western Australia. The parties also jointly own domestic gas processing facilities and associated fields at Varanus Island and Devil Creek.
The ACCC found after detailed investigation that it is unlikely that the proposed acquisition will result in a substantial lessening of competition in the supply of gas to domestic customers in Western Australia.
"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," ACCC Chair Rod Sims 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 Western Australia, 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," Mr Sims said.
In addition, the ACCC approached the relevant WA government departments and no concerns were expressed about the proposed acquisition.
Many market participants also did not express competition concerns, but some customers did and the ACCC investigated those concerns and took them into account in its assessment of the proposed acquisition.
