THE ACCC will not oppose Australia Pacific LNG’s (APLNG) proposed acquisition of the Ironbark coal seam gas project from Origin Energy (Origin).

APLNG is a large gas producer with significant gas tenements in eastern Australia. It supplies almost 30 percent of the gas going into the east coast market, and processes the balance of its gas for export at its LNG facility near Gladstone, Queensland.

Origin is a 37.5 percent shareholder in APLNG and is the upstream operator for APLNG, responsible for the development of its CSG fields in the Surat and Bowen basins and the main transmission pipeline that transports the gas to the LNG facility near Gladstone.

Ironbark is an undeveloped coal seam gas permit held by Origin, located in the Surat Basin. It has expected reserves of around 129 PJ of 2P reserves, which is approximately 0.34 percent of total eastern Australian reserves.

In reaching its decision, the ACCC considered the effect of the acquisition on domestic gas supply and the level of competition between suppliers of domestic gas.

“We had regard to the relatively small size of the Ironbark project. We also considered the alternatives available to Origin to either sell Ironbark to someone else or develop the project itself,” ACCC Commissioner Roger Featherston said.

“In our view, neither of these alternatives would lead to a significantly different outcome for domestic gas users from that of the sale of Ironbark to APLNG.”

The ACCC concluded that the proposed acquisition would be unlikely to substantially lessen competition in any domestic gas market.

“However, we have long voiced concerns about the challenges facing east coast domestic gas users and will continue to closely examine the acquisition of further gas reserves by major LNG producers and the likely impact on competition,” Mr Featherston said.

Further information is available at APLNG - proposed acquisition of Ironbark gas project.

Background

Origin Energy ATP 788P Pty Ltd, also known as Ironbark, is an Authority to Prospect held by Origin. It is a proposed coal seam gas project located north of Tara, Queensland, in the Surat Basin.

Ironbark is in the exploration and appraisal stage, and is not currently producing. Origin estimates Ironbark has 129 PJ of 2P reserves and 192 PJ of 3P reserves.

APLNG is a joint venture between Origin (37.5 percent), ConocoPhillips Australia Pacific LNG Pty Ltd (37.5 percent) and Sinopec Australia Pacific LNG Pty Limited (25 percent).

It has significant gas tenements in the Surat and Bowen basins and processes CSG into LNG for export from its facility near Gladstone, Queensland. It is also the largest supplier of gas to domestic customers and in 2018 supplied close to 30 percent of total east coast gas.

Origin is an ASX-listed major Australian energy retailer, supplying customers with electricity, natural gas and LPG.

Origin is the upstream operator for APLNG and is responsible for the development of its CSG fields in the Surat and Bowen basins and the main transmission pipeline that transports the gas to the LNG facility on Curtis Island near Gladstone.

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THE Queensland Resources Council (QRC) has welcomed a commitment from the Liberal National Party to keep the rate of royalties on the Queensland resources industry stable for the next five years.

Speaking from Mackay, QRC chief executive Ian Macfarlane said LNP Leader Deb Frecklington has responded to the industry, union and small business calls for no change in rates of royalties to provide investment and employment certainty for the resources sector in Queensland, which already supports the jobs of more than 315,000 Queenslanders.

The QRC has secured the commitment that if the LNP win the next State election in October next year that royalty rates will be stable for that first four-year term.

“I welcome the commitment of the LNP.  They have listened to business, workers and resource companies and they have responded," Mr Macfarlane said.

“The commitment from Deb Frecklington today is a commitment of confidence in the resource sector, in resource communities and most importantly resource jobs.

“Annastacia Palaszczuk and Jackie Trad need to match that commitment," he said.

"The resources industry will already pay the Palaszczuk Government a record $5.3 billion in royalties this financial year. We remain concerned Treasurer Jackie Trad will increase royalties in the State Budget on June 11 as part of an anti-mining agenda.

“An increase in royalties undermines new and existing jobs. The CFMEU knows that and they have called on the Palaszczuk Government to rule out royalties increases.

"A royalty increase undermines investment and saps confidence in those 14,000 Queensland businesses who supply the resources industry.  The Mackay-based Resources Industry Network knows that and they too have called on the Palaszczuk Government to rule out increases.”

A survey of more than three quarters (77%) of resource company CEOs, released before the Federal election, found that uncertainty about Queensland Government royalty rates affected the likelihood of their projects proceeding.

www.qrc.org.au

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THE Palaszczuk Government would jeopardise Queensland coal exports to Japan if it increased the rate of royalties on resource commodities when it delivers its State Budget next month, according to the Queensland Resources Council (QRC).

On the eve of Premier Annastacia Palaszczuk visiting Tokyo, QRC chief executive Ian Macfarlane said US coal exports to Japan were at five-year highs and a royalty hike could make US coal more attractive than Queensland coal in the Japanese market.

"Coal is Queensland's biggest export commodity and Japan is one of our longest and most important markets," Mr Macfarlane said.

"When we have supply problems, such as in the wake of damaging cyclones, US coal often fills the shortfall.

“US coal exports to Japan increased by 35 percent between 2017 and 2018.  Let’s not help US coal miners.  Let’s not help Donald Trump steal mining jobs from Queensland.

“Our royalty rates and taxes in Queensland are among the highest in the world already.  The Palaszczuk Government is set to take a record of almost $4.5 billion in coal royalties this financial year based on the current rates," Mr Macfarlane said.

“If we make Queensland coal even more expensive, key markets like Japan may look elsewhere. That means a loss of exports, employment and investment for Queensland.

“With Queensland’s unemployment rate of 5.9 percent among the nation’s highest, Queenslanders - particularly in the regions - cannot afford more attacks and more tax on the resources industry from the Palaszczuk Government.," he said.

“On behalf of Queenslanders, we urge the Premier to rule out changes to royalty rates. We also urge the Premier, as Trade Minister, to reassure Japanese coal investors and importers in Tokyo that there will be no royalty change and encourage them to continue to buy Queensland coal and support Queensland jobs and Queensland communities.”

Mr Macfarlane said while Victorian voters and the likes of Bob Brown might not support the resources sector - yet rely on it for their everyday lives - all Queenslanders do.

In 2017-18, the resources industry supported more than 315,000 jobs in Queensland.  The coal industry alone supported more than 200,000 full-time equivalent jobs or 9 percent of Queensland’s total workforce.  The sector also contributed $43.4 billion to the State’s economy, supported more than 6000 local businesses and more than 560 community organisations. 

www.qrc.org.au

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“OFFICIAL figures for the first quarter of 2019 show that construction activity across Australia dropped by 1.9 percent compared with the end of 2018 – but there were signs of growth in some important areas,” Master Builders Australia’s chief economist Shane Garrett said.  

“During the March 2019 quarter, civil construction activity dropped back by 3.9 percent although commercial building saw growth of 3.6 percent to reach a new all-time high

“The re-election of the Morrison Government will boost confidence in our industry and is being welcomed by the hundreds of thousands of small firms active in building and construction,” Mr Garrett said.

“Unfortunately, the decline in civil construction activity during the opening quarter of this year will not be a surprise to the industry. The time taken for government infrastructure announcements to translate into real, visible activity on the ground is often far too long.

“We don’t want to see projects languishing on lists. We are hopeful that the government’s renewed mandate will drive new energy in getting more projects shovel ready and construction work started,” Mr Garrett said.

“Turning to the commercial building space, it is encouraging to see the continuation of modest yet consistent growth. Population and employment increases continue to be robust in most parts of Australia. This creates the need for more offices, schools, hospitals and shops. Today’s figures indicate that this demand is indeed being matched by the building industry,” he said.

“Not surprisingly, residential building moved backwards by 2.3 percent during the March 2019 quarter. Despite the fact that Australia’s population expanded by almost 400,000 over the past 12 months, fewer new homes are being built due to the negative impact of micro factors including the slow motion credit environment post-Royal Commission.

“We look forward to the quick implementation of the government’s election pledges around First Home Buyer home loans and support for small businesses,” Mr Garrett said. 

www.masterbuilders.com.au

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