QIC Sues EnergyAustralia Over Gas Withdrawal Capabilities At Iona Storage Facility
Energy retailer EnergyAustralia has had a A$967mn (US$721mn) claim filed against it for allegedly providing misleading information on withdrawal capabilities during its sale of the Iona gas storage facility in Victoria, Australia, court documents show.
The facility was only able to generate approximate withdrawal rates of between 299 TJ/d and 314 TJ/d (or less), rather than the 390 TJ/d represented during the sale, according to the court documents which Australian mid-stream energy infrastructure business Lochard Energy had lodged May 19.
“Further, the plaintiffs’ best current estimate of the withdrawal capacity of the Iona Facility in its state at completion, and when the quantity of gas in the storage reservoirs approaches 25% of the storage capacity, is approximately 241 TJ/d,” according to the court documents.
Lochard Energy was formed to operate the Iona Gas Plant and associated facilities following the sale of the Iona gas plant for A$1.78bn (US$1.33 at current exchange rate) by EnergyAustralia to a consortium led by government-owned investment company Queensland Investment Corporation in December 2015.
EnergyAustralia said May 19 that it rejects the assertion and will “vigorously defend the action”.
“Since the Iona transaction was completed in 2015 EnergyAustralia and Lochard Energy have had a good and productive relationship. Regardless of the dispute, EnergyAustralia remains committed to working with Lochard Energy to preserve the integrity of the Victorian and South Australia gas market and to maintain reliable and affordable supplies of gas,” EnergyAustralia said.
QIC declined to comment.
The Iona Gas Plant, which was commissioned in 1999, is the largest independent provider of storage services to Australia’s east coast market, Lochard says.
The processing plant has several functions structured around the supply of gas from the Iona storage facility and the processing of gas from the offshore Casino Field and is configured to receive gas from neighbouring fields and new fields as they become developed, it says.
Nathan Richardson