Oz Watchdog Will not Block APLNG Deal

The Australian competition watchdog, the Australian Competition and Consumer Commission (ACCC), May 22 said it will not oppose Australia Pacific LNG’s (APLNG) proposed acquisition of the Ironbark coalbed methane (CBM) project from Origin Energy.

“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,” he added.

In February this year, Origin Energy agreed to sell its Ironbark project to APLNG for A$231mn ($159mn). Ironbark is in Queensland’s Surat Basin. In August 2018, Origin announced that it had entered first stage of front end engineering design (Feed) while also assessing alternate strategic options for the asset. Origin owns 37.5% of APLNG, along with ConocoPhillips (37.5%) and Sinopec (25%). 

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,” Featherston said.