The ACCC has granted interim authorisation for Vintage Energy Ltd (ASX: VEN), Metgasco Ltd (ASX: MEL) and Bridgeport (Cooper Basin) Pty Ltd to enter into joint marketing arrangements.
Vintage, Metgasco and Bridgeport are joint venture partners at the Vali field, a new gas field in the early stages of development which is located in the Queensland Cooper/Eromanga Basin. None of the parties currently produce or sell natural gas.
Interim authorisation allows the parties to begin jointly negotiating and entering into conditional long-term agreements with customers for the supply of gas from the Vali field.
The parties can also jointly supply minor quantities of gas to customers on a fully interruptible basis for a short period until 31 December 2021, while they establish the flow characteristics of the Vali field.
"The ACCC considers interim authorisation will provide investment certainty for the parties to expedite development of the Vali field and bring this new gas supply to the market sooner," ACCC Commissioner Stephen Ridgeway said.
"Given the small amount of gas to be jointly marketed, the proposed joint marketing arrangements are unlikely to adversely affect competition. Any long-term gas supply agreements entered into with customers are conditional on the ACCC's final determination."
Vintage, Metgasco and Bridgeport applied for authorisation to jointly market and sell gas from the Vali field to customers on common terms and conditions including price. Without authorisation, the joint marketing arrangement would risk breaching competition laws.
More information, including the ACCC's interim authorisation statement of reasons, is available at Vintage Energy Ltd - Vali Gas Joint Venture.
Background
Vintage Energy Ltd (ASX: VEN) operates the Vali field, and holds 50 per cent interest in the Vali joint venture.
Metgasco Ltd (ASX: MEL), and Bridgeport (Cooper Basin) Pty Ltd (a wholly owned subsidiary of New Hope Corporation Limited (ASX: NHC)), each hold 25 per cent interest in the Vali joint venture.
Under the Vali joint venture agreement, Bridgeport may reserve 50 per cent of its share of gas to Brickworks Limited (ASX: BKW).
The amount of gas to be jointly marketed from the Vali field is small compared to the overall size of the east coast gas market. Upon full development of the Vali field, its annual gas production will be equal to approximately 0.5 per cent of the annual domestic gas demand in the east coast market, and less than 0.2 per cent when LNG export demand is included with domestic demand.
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 2010 (the Act).
Section 91 of the Act 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 an authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.
