bid threatens pipeline

This is one reason why Santos will increase offer soon


Bid threatens pipeline

October 27, 2006 12:00am

THE Australian Competition and Consumer Commission fears Santos's proposed $606 million acquisition of Queensland Gas Company could stymie the PNG gas pipeline project.

In a statement of issues released yesterday, the ACCC said it believed that the $5.2 billion PNG pipeline project acted as a "shadow competitor which influences the competitive tension between existing gas producers".
Santos has a stake in the PNG gas field which will supply gas to the beleaguered pipeline but has yet to sign up to take gas.

The competition regulator was also examining whether the takeover bid would affect the gas market in Queensland, which was already dominated by Origin Energy and Santos.

The ACCC will be taking submissions on the matter until November 9 and expects to deliver its determination on December 7.

Meanwhile Adelaide-based Santos yesterday said it was more than 4 million barrels of oil ahead of where it was this time last year, and was on track for record full-year profit and production.

It announced its highest ever quarterly production figure of 16.6 million barrels of oil equivalent.

QGC shares closed at $1.46 yesterday, well above Santos's offer price of $1.26.


http://www.news.com.au/couriermail/story/0,23739,20649992-3122,00.html