EnergyAustralia solicits final bids for Iona gas storage plant

By BRETT FOLEY
Bloomberg

Jemena, the energy distributor controlled by State Grid Corp. of China, is weighing a final bid for EnergyAustralia’s Iona gas storage plant.

Jemena is looking for opportunities to expand its business and is examining the Iona facility, as well as other options in the energy industry, spokeswoman Rebecca Harrison said in an e-mailed response to questions. It hasn’t yet decided whether to make a final offer, Harrison said.

The gas storage plant, which may fetch more than A$1 billion ($720 million), has also drawn interest from other suitors including Australian pipeline owner APA Group and fund manager QIC, according to people with knowledge of the matter.

Final bids are due around the end of next month, the people said, asking not to be identified as the information is private.

EnergyAustralia’s owner, Hong Kong-based CLP Holdings, is selling assets and shifting attention to other markets after saying in February it faces “extremely challenging” conditions in Australia. Lazard is advising it on the sale, the people said.

Australia’s competition regulator has asked for comments on APA’s intention to purchase Iona by Aug. 26, and it is expected to decide by Sept. 30 whether APA can proceed. The Sydney-based company owns a liquefied natural gas (LNG) storage facility at Dandenong, southeast of Melbourne, which supplies gas to Victoria state during peak demand in winter.

Peak Demand

Spokesmen for APA and QIC declined to comment. A spokeswoman for EnergyAustralia said the company is “pleased with the process to date,” declining to comment on specific bidders.

The Iona plant, located in Victoria, has storage capacity to supply as much as 500 terajoules/day of gas, according to EnergyAustralia’s website. The facility is used by energy companies to store gas during periods of low usage, which can then be distributed by pipeline to supply markets around Melbourne and Adelaide when demand is high.

Jemena owns more than A$9 billion of Australian gas, power and water distribution assets and supplies millions of homes and businesses, its website shows. State Grid, China’s largest power distributor, owns 60% of the company, with the rest held by Singapore Power.

The Chinese state-owned company is also weighing a joint bid with a Macquarie Group fund for New South Wales power transmission company TransGrid, people familiar with the matter said last month.

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