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Shell’s takeover of BG Group delayed

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LNG Industry,

Shell’s US$70 billion takeover of BG Group has been delayed by the Australian antitrust regulator by a week. This is a further extension of the previous two-month delay, which was caused by concerns surrounding the impact the deal might have on the local gas market. Specifically, there were concerns that the takeover would damage local supply in favour of exports to Asia through the BG LNG terminal on the East coast of Australia. The Australian Competition and Consumer Commission (ACCC) said that it aims to make a decision by 19 November 2015.

In September 2015, the ACCC claimed that the takeover would mean that Shell would be more likely to favour LNG exports, rather than selling LNG to the domestic market, because the takeover would align Shell’s joint venture (JV) with Petrochina with the Queensland Curtis LNG (QCLNG) plant. As a result, the ACCC said, there would be a decrease in the volume of gas in Australia, and a consequential rise in prices.

The deal has gained approval from the EU, the US and Brazil, but still requires approval from China and Australia. Nonetheless, Shell still estimates that the takeover will be complete by early 2016.

In a statement, Shell said: “Shell is confident the transaction is good for the development of additional east coast gas supply, and that this will ultimately benefit Australian consumers”

Edited from press release by David Rowlands

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