The Australian Competition and Consumer Commission proposes to allow energy companies Woodside Energy and Benaris International to continue to cooperate in selling LPG from Victoria's Otway Basin for another three years.
Under the ACCC's proposed decision Woodside and Benaris will be able to agree on the common terms and conditions, including price, upon which LPG produced by the Otway gas project for and on behalf of Woodside and Benaris will be jointly marketed and sold.
Woodside and Benaris are two of the four joint-venture partners in the Otway gas project, located off the south-west coast of Victoria, near Port Campbell. The Otway project supplies approximately three per cent of LPG produced in the Victorian and South Australian LPG production basins.
In proposing to allow the joint marketing arrangement the ACCC has accepted that it is likely to be cheaper and simpler for Benaris to let Woodside sell the two companies' LPG to the market.
The ACCC also notes that the amount of LPG Benaris and Woodside have to sell represents a small fraction of the LPG produced in south-eastern Australia and so there is likely to be little, if any anti-competitive detriment flowing from the arrangement.
In light of these factors the ACCC considers that the benefits to the public of the arrangement are likely to outweigh their competitive detriments – the test to be met under the Trade Practices Act 1974. The ACCC is now inviting comments on this finding and its proposal to authorise the joint marketing arrangements.
In 2006 the ACCC authorised Woodside and Benaris to engage in similar arrangements for three years and in 2008 the two began selling LPG together to distributor Elgas. That authorisation expired in April 2009 and in May 2009 the ACCC granted interim authorisation for the parties to continue joint marketing while it considered and consulted on the merits of the full application.
The ACCC's draft determination will be available from the ACCC website via the Public Registers and Authorisations and notifications registers links.
The ACCC invites submissions from interested parties in relation to the draft determination before making its final decision. Parties wishing to make submissions should do so by 17 July 2009. Please refer to the website for further information about making a submission to the ACCC.