Marubeni Corporation and Osaka Gas Co Ltd - proposed acquisition of certain assets of the APA Group

Osaka Gas Co Ltd
Marubeni Corporation

Certain assets of the APA Group

Marubeni and Osaka Gas propose to acquire 49.9% and 30.2% respectively of an investment vehicle that will hold the following assets of the APA Group:
- the Telfer, Bonaparte and Wickham Point gas pipelines;
- the Murraylink electricity interconnector connecting New South Wales and South Australia;
- the Directlink electricity interconnector connecting New South Wales and Queensland;
- the 32MW gas-fired X41 power station at Mt Isa, Queensland;
- the 27MW coal-seam gas-fired Daandine power station at Kogan, Queensland;
- the 29Tj/day coal-seam gas processing facility at Tipton West, Queensland; and
- the 12Tj/day coal-seam gas processing facility at Kogan North, Queensland.

The ACCC assessed the proposed acquisition in terms of markets for the wholesale supply of gas in Western Australia, and for the wholesale supply of electricity in Queensland and New South Wales.

The ACCC formed the view that the proposed acquisition was unlikely to raise competition concerns in the market for the wholesale supply of gas in Western Australia due to the significant distance between the Crux Gas Project (in which Osaka Gas has a minority interest) and the Telfer pipeline.

In relation to the Queensland market for the wholesale supply of electricity, the ACCC considered the proposed acquisition unlikely to raise horizontal competition concerns due to the existence of significant electricity generation competitors in Queensland.

The ACCC also considered Marubeni's acquisition of a minority interest in electricity transmission assets unlikely to substantially lessen competition in the markets for the wholesale supply of electricity in Queensland and New South Wales. The proposed acquisition would appear unlikely to enable Marubeni to foreclose competition between generators in these markets.

In conclusion, the ACCC formed the view that Osaka Gas and Marubeni's proposed acquisition of certain assets of the APA Group was unlikely to contravene section 50 of the Trade Practices Act 1974.