Shell-BG Deal Faces Further Delay in Australia
October 22 2015 - 6:30AM
Dow Jones News
By Sarah Kent
LONDON--Australia's antitrust regulator has delayed a decision
on Royal Dutch Shell PLC's $70 billion takeover of BG Group by
another week, extending a previous delay of around two months amid
concerns over the impact the deal could have on the local gas
market.
The Australian Competition and Consumer Commission said on its
website Thursday that it now expects to make a decision on November
19, and that the delay would give it "additional time to consider
the proposed acquisition." In September, the regulator said it
would delay a decision on the deal by around two months amid
concerns raised by local businesses that Shell would curb local
supply in favor of more lucrative exports to Asia through BG's
liquefied natural gas terminal on the east coast.
When Shell agreed to a deal with BG in April, it already owned
the largest known undeveloped gas reserves in eastern Australia
through a joint venture with PetroChina Co. Earlier this year that
project dropped plans to build a new LNG plant and started looking
for a way to supply rival plants, including BG's Queensland Curtis
LNG plant, which began operations at the end of last year.
The ACCC's preliminary view published last month was that a
Shell-BG combination would align Shell's joint venture with
PetroChina with the QCLNG plant, incentivizing Shell to favor LNG
exports over supplying gas to the domestic market. The potential
reduction in gas volumes could substantially lessen competition and
push up prices, the ACCC 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," the company said in an email
statement, adding that it views the latest delay as "an indication
of the thorough process being undertaken by the ACCC."
The deal has already received regulatory approval from the
European Union, the U.S. and Brazil, but still needs approvals from
Australia and China to go ahead. Shell says the combination remains
on track to complete in early 2016.
Write to Sarah Kent at sarah.kent@wsj.com
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(END) Dow Jones Newswires
October 22, 2015 06:15 ET (10:15 GMT)
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