The ACCC will not oppose Lochard Energy’s proposed acquisition of the Heytesbury depleted gas reservoir assets from Origin Energy.
Lochard owns and operates the underground gas storage facility at Iona, near Port Campbell, which is currently the only underground gas storage facility in Victoria.
The Heytesbury assets are depleted gas reservoirs located near the Iona facility, which may have potential for underground gas storage development. Lochard is paying Origin a nominal amount for the assets.
The ACCC’s investigation focused on competition for the supply of underground gas storage in Victoria and South Australia.
“Lochard has a dominant position in the supply of underground gas storage in southern Australia, however we found that another operator is unlikely to be able to viably develop the Heytesbury assets, due to technical and commercial uncertainties,” ACCC Chair Rod Sims said.
“On the other hand, Lochard may have the option to use its existing Iona infrastructure and develop the Heytesbury assets for incremental gas storage.”
“Most customers of underground gas storage services were not concerned about the proposed acquisition,” Mr Sims said.
“We also noted the Golden Beach proposed underground gas storage solution which, if developed, is likely to place competitive constraints on Lochard’s Iona facility,” Mr Sims said.
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Background
Lochard is an Australian energy infrastructure business. In addition to owning and operating the Iona storage facility, it also provides natural gas processing services.
Origin holds natural gas production, energy retailing and electricity generation businesses. It acquired the Heytesbury assets from Santos in 2004.
Underground gas storage facilities use depleted gas fields and associated above-ground infrastructure to store and withdraw gas. These facilities are generally used to meet seasonal gas demand in southern Australia. They are becoming increasingly important in helping to manage supply risks as reserves in Victorian gas basins decline.
Golden Beach is a gas reservoir located in the offshore Gippsland Basin. It is owned by GB Energy.
