The Australian Competition and Consumer Commission has issued a determination granting authorisation* to a joint marketing arrangement for the sale of liquefied petroleum gas produced by the Otway Gas Project off the coast of Victoria.
"The ACCC has decided to grant authorisation to Woodside Energy Ltd, Benaris International Pty Ltd and CalEnergy Gas (Australia) Ltd for three years to negotiate and establish common terms and conditions for the sale of Otway LPG and to jointly market and sell that LPG to a common customer or customers", ACCC Chairman, Mr Graeme Samuel, said today.
"The Otway Project is a joint venture between each of the applicants and Origin Energy Ltd. Benaris and CalEnergy hold minority interests in the joint venture, and will consequently control relatively small volumes of the LPG produced.
The ACCC previously granted interim authorisation** to the applicants to begin contract negotiations and to market and sell the LPG to be produced and delivered by the Otway Project from May/June 2006 through to December 2006. A draft determination proposing to grant authorisation to the applicants for three years was issued by the ACCC on 15 February 2006.
"The applicants advise that absent authorisation, it is most likely that Benaris and CalEnergy would sell their LPG entitlements to Woodside or Origin. Given this, and the higher cost of marketing small volumes of LPG, the ACCC considers that, absent authorisation, Benaris and CalEnergy are likely to sell their entitlements to Woodside or Origin.
"Also, given the separate marketing of the remaining significant participant in the Otway Project, Origin, and the small volumes of LPG produced by Benaris and CalEnergy, the ACCC considers that little, if any, anti-competitive detriment is likely to result from the applicants' joint marketing arrangement proposal.
"In any event, the separate marketing of Origin's LPG and the competitive constraint provided by LPG producers from other gas fields and refineries would limit any anti-competitive detriment generated by the proposed arrangement.
"The ACCC is satisfied that any detriment will be outweighed by benefit in the form of cost savings to Benaris and CalEnergy".
More information regarding the application and a copy of the determination are available using the link below.