The ACCC will not oppose Australia Pacific LNG’s (APLNG) proposed acquisition of the Ironbark coal seam gas project from Origin Energy (Origin).
APLNG is a large gas producer with significant gas tenements in eastern Australia. It supplies almost 30 per cent of the gas going into the east coast market, and processes the balance of its gas for export at its LNG facility near Gladstone, Queensland.
Origin is a 37.5 per cent shareholder in APLNG and is the upstream operator for APLNG, responsible for the development of its CSG fields in the Surat and Bowen basins and the main transmission pipeline that transports the gas to the LNG facility near Gladstone.
Ironbark is an undeveloped coal seam gas permit held by Origin, located in the Surat Basin. It has expected reserves of around 129 PJ of 2P reserves, which is approximately 0.34 per cent of total eastern Australian reserves.
In reaching its decision, the ACCC considered the effect of the acquisition on domestic gas supply and the level of competition between suppliers of domestic gas.
“We had regard to the relatively small size of the Ironbark project. We also considered the alternatives available to Origin to either sell Ironbark to someone else or develop the project itself,” ACCC Commissioner Roger Featherston said.
“In our view, neither of these alternatives would lead to a significantly different outcome for domestic gas users from that of the sale of Ironbark to APLNG.”
The ACCC concluded that the proposed acquisition would be unlikely to substantially lessen competition in any domestic gas market.
“However, we have long voiced concerns about the challenges facing east coast domestic gas users and will continue to closely examine the acquisition of further gas reserves by major LNG producers and the likely impact on competition,” Mr Featherston said.
Further information is available at APLNG – proposed acquisition of Ironbark gas project.
Origin Energy ATP 788P Pty Ltd, also known as Ironbark, is an Authority to Prospect held by Origin. It is a proposed coal seam gas project located north of Tara, Queensland, in the Surat Basin.
Ironbark is in the exploration and appraisal stage, and is not currently producing. Origin estimates Ironbark has 129 PJ of 2P reserves and 192 PJ of 3P reserves.
APLNG is a joint venture between Origin (37.5 per cent), ConocoPhillips Australia Pacific LNG Pty Ltd (37.5 per cent) and Sinopec Australia Pacific LNG Pty Limited (25 per cent).
It has significant gas tenements in the Surat and Bowen basins and processes CSG into LNG for export from its facility near Gladstone, Queensland. It is also the largest supplier of gas to domestic customers and in 2018 supplied close to 30 per cent of total east coast gas.
Origin is an ASX-listed major Australian energy retailer, supplying customers with electricity, natural gas and LPG.
Origin is the upstream operator for APLNG and is responsible for the development of its CSG fields in the Surat and Bowen basins and the main transmission pipeline that transports the gas to the LNG facility on Curtis Island near Gladstone.