ACCC okays joint marketing of Otway LPG

THE Australian Competition and Consumer Commission (ACCC) had finalised its approval for Woodside and its Otway Gas Project joint venture partners to jointly market their LPG.
ACCC okays joint marketing of Otway LPG ACCC okays joint marketing of Otway LPG ACCC okays joint marketing of Otway LPG ACCC okays joint marketing of Otway LPG ACCC okays joint marketing of Otway LPG

The ACCC has authorised Woodside Energy Ltd, Benaris International Pty Ltd and CalEnergy Gas (Australia) Ltd to jointly market and sell their shares of the liquefied petroleum gas (LPG) produced by the project for three years.

This follows a draft determiniation issued in early February.

Woodside has a 51.55% stake and is the operator of the offshore Victorian project. Origin Energy has 29.75% equity, Benaris Internationl N.V. has 12.7% and CalEnergy Gas holds the remaining 6%.

Origin will separately market its share of the LPG while the other partners can jointly market their gas for three years.

ACCC chairman Graeme Samuel noted the higher cost of marketing small volumes of LPG and said the commission considered that without authorisation, Benaris and CalEnergy would have been likely to sell their LPG entitlements to Woodside or Origin.

"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," Samuels said.

"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".

Construction is already well underway at the Otwya gas projkect's onshore gas treatment plant and the project is on schedule to produce first gas in mid-2006.

Production is expected to be 60 petajoules of gas a year along with 100,000tpa of LPG and 800,000 barrels a year of condensate. Production from three wells planned for the nearby Geographe field will be added in a few years’ time.

Most read Commodity


Most read Commodity