The ACCC has granted interim authorisation for Vintage Energy Ltd (ASX: VEN), Metgasco Ltd (ASX: MEL) and Bridgeport (Cooper Basin) Pty Ltd, a wholly owned subsidiary of New Hope Corporation Limited (ASX: NHC), to enter into joint gas marketing arrangements.
At the same time, the ACCC issued a draft determination proposing to grant final authorisation to the arrangements and is inviting submissions in response.
Vintage, Metgasco and Bridgeport are joint venture partners in respect of the Odin field, a new prospective gas field located across the Queensland and South Australian borders.
Authorisation will enable the parties to jointly market gas produced from the Odin field for 5 years. Within this period, the parties will be able to enter into gas supply agreements with customers on common terms and conditions including price. Those gas supply agreements may be for a term of up to 15 years.
Without authorisation from the ACCC, these joint marketing arrangements would risk breaching competition laws.
"The ACCC's preliminary view is that joint marketing is likely to result in public benefit by enabling this new gas supply from the Odin field to reach the market sooner," ACCC Commissioner Anna Brakey said.
"The proposed joint marketing arrangement is unlikely to adversely affect competition, given the amount of gas to be jointly marketed from the Odin field is relatively small compared to the overall size of the east coast gas market."
"Interim authorisation will allow the parties to begin engaging with potential customers immediately but any long-term agreements they enter into with customers are conditional on the ACCC's final determination," said Ms Brakey.
The ACCC is seeking submissions from interested parties in relation to the draft determination by 3 March 2023.
The draft determination and more information on how to make a submission are available on the ACCC public register at Vintage Energy and Ors - Odin field.
Background
The Odin field lies within the area covered by Petroleum Retention Licence 211 (PRL 211) granted by the South Australian Government, and Authority to Prospect 2021 (ATP 2021) granted by the Queensland Government. Both licences are owned by the PRL 211 and ATP 2021 joint venture participants in the following proportions: Vintage Energy Ltd, 50 per cent; Metgasco Ltd, 25 per cent; and Bridgeport (Cooper Basin) Pty Ltd, 25 per cent.
The Odin field is estimated to hold 40 petajoules of 2C Contingent Resources.
Vintage Energy Ltd, Metgasco Ltd and Bridgeport (Cooper Basin) Pty Ltd are also currently developing the Vali field, which lies within ATP 2021. In May 2021, the parties were granted authorisation to enter into joint gas marketing arrangements in respect of the Vali field. A copy of the determination is available on the ACCC public register at: Vintage Energy and Ors - Vali field.
Note
ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act (CCA).
Section 91 of the CCA allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.
The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.
Broadly, the ACCC may grant authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.
In December 2022, the Minister for Finance made an order under section 53M of the CCA that introduced a temporary, one-year price cap of $12 per gigajoule. This principally applies to gas sold by east coast and Northern Territory gas producers and their affiliates to wholesale customers in Australia. The ACCC is responsible for enforcing the price cap and making decisions on applications for exemption from the price cap. That exemption regime is wholly separate to the authorisation process administered by the ACCC.
