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Australia fears LNG monopoly

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LNG Industry,


Royal Dutch Shell’s proposed US$70 billion purchase of BG Group has caused fears amongst the Australian Competition and Consumer Commission (ACCC). The ACCC is concerned that this takeover would result in Shell’s Arrow Energy selling its LNG to BG Group’s Queensland Curtis LNG plant (QCLNG) in order for it to exported. Shell, however, maintains that BG has enough LNG to meet both domestic and overseas demand.

Rod Sims, the ACCC Chairman, said: “Currently, Arrow has the largest quantity of uncommitted gas reserves in eastern Australia and there are a limited number of other potential suppliers to the domestic market. If the proposed acquisition resulted in less supply of gas to the domestic market […] this could substantially lessen competition to supply domestic gas users and lead to higher domestic prices and more restrictive contractual terms.”

Whilst the proposed purchase has been cleared by both the US and Brazilian anti-trust authorities, it is still yet to receive a final answer from the ACCC. Concerns that Shell’s takeover of BG Group would result in a monopoly in the domestic market – and thus raise the price of LNG – have resulted in the ACCC declining to give a final decision on the matter until 12 November 2015.

Edited from various sources by David Rowlands

Read the article online at: https://www.lngindustry.com/liquefaction/17092015/australia-fears-lng-monopoly-1312/


 

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