The ACCC has decided not to oppose Santos Limited’s (ASX: STO) proposed acquisition of Quadrant Energy Holdings Pty Ltd.
Santos and Quadrant are active in the production and supply of natural gas (and related condensate by-products) and crude oil in Western Australia. The parties also jointly own domestic gas processing facilities and associated fields at Varanus Island and Devil Creek.
The ACCC found after detailed investigation that it is unlikely that the proposed acquisition will result in a substantial lessening of competition in the supply of gas to domestic customers in Western Australia.
“The ACCC considers that a combined Santos/Quadrant will continue to face strong competition from a range of suppliers, including large LNG producers such as Chevron and Woodside,” ACCC Chair Rod Sims said.
“Most market participants believe the Western Australian domestic gas market is currently oversupplied. While the demand-supply balance could tighten in future, the ACCC considers that the proposed acquisition will not have a significant impact on future gas prices.”
“In Western Australia, gas exporters are required to reserve 15 per cent of their gas for the domestic market, so this should ensure that gas available for domestic customers continues to grow, and from a range of players,” Mr Sims said.
In addition, the ACCC approached the relevant WA government departments and no concerns were expressed about the proposed acquisition.
Many market participants also did not express competition concerns, but some customers did and the ACCC investigated those concerns and took them into account in its assessment of the proposed acquisition.
Further information is available at Santos Ltd - proposed acquisition of Quadrant Energy.
Background
Santos is an ASX-listed company that produces oil and gas in Australia and Papua New Guinea. In Western Australia, aside from interests held jointly with Quadrant, it has interests in exploration and undeveloped gas assets in the Browse, Bonaparte and Carnarvon Basin.
Quadrant is an oil and gas company with a primary focus on activities in the Exmouth and Carnarvon Basins in Western Australia. Aside from interests held together with Santos, it jointly owns the Macedon domestic gas processing plant with BHP, and has interests in various oil joint ventures and exploration permits, including in the Bedout Basin.