CKM Australia Bidco Pty Ltd, CK Asset Holdings Limited, CK Infrastructure Holdings Limited and Power Assets Holdings Limited

Company or individual details

  • CKM Australia Bidco Pty Ltd
    627690608
  • CK Asset Holdings Limited
  • CK Infrastructure Holdings Limited
  • Power Assets Holdings Limited

Undertaking

On 12 September 2018, the ACCC announced it had accepted an undertaking (the Undertaking) from CKM Australia Bidco Pty Ltd (the Company), CK Asset Holdings Limited, CK Infrastructure Holdings Limited (CKI) and Power Assets Holdings Limited (the latter three referred to in the Undertaking as the Consortium), pursuant to s87B of the Competition and Consumer Act 2010 (Cth) in connection with the Company and the Consortium's proposed acquisition of the APA Group (the Proposed Acquisition).

The ACCC concluded that, in the absence of the Undertaking, the Proposed Acquisition would be likely to substantially lessen competition. In particular, the ACCC was concerned about:

  • the removal of the CK Consortium as a competitor in relation to new pipeline development; and
  • a reduction in competition for the supply of gas transmission and storage services in Western Australia, and in particular a loss in competitive tension between:
    • the Dampier to Bunbury Natural Gas Pipeline (owned and operated by CKI) and the Parmelia Gas Pipeline (owned and operated by APA) for the supply of gas transmission services to Perth;
    • the Goldfields Gas Pipeline (operated and majority owned by APA) and the Fortescue River Pipeline (owned and operated by CKI in a joint venture with TransAlta) for the supply of gas transmission services to customers in the Pilbara; and
    • the Mondarra Gas Storage Facility (owned by APA) and the Tubridgi Gas Storage Facility (owned by CKI) for the supply of gas storage services in Western Australia.

The objective of the Undertaking is to address these concerns, in particular by placing obligations on the Company to:

  • ensure that the Divestiture Business (as defined in Schedules 1 and 4 to the Undertaking) which includes the Parmelia Gas Pipeline, the Mondarra Gas Storage Facility and an 88.2% interest in the Goldfields Gas Pipeline is sold to a purchaser approved by the ACCC;
  • create or strengthen a viable, effective, stand-alone, independent and long-term competitor in the development of new gas transmission pipelines;
  • create or strengthen a viable, stand-alone, independent and long-term competitor in the supply of gas pipeline transmission and storage services in Western Australia;
  • ensure that the purchaser of the Divestiture Business has all the necessary associated assets and rights to compete effectively in the development of new gas transmission pipelines;
  • ensure that the purchaser of the Divestiture Business has all the necessary associated assets and rights to compete effectively in the supply of gas transmission and storage services in Western Australia;
  • maintain the economic viability, marketability, competitiveness and goodwill of the Divestiture Business prior to the divestiture pursuant to the Undertaking; and
  • provide for the effective oversight of the Company and the Consortium's compliance with the Undertaking.