As of yesterday Epic had failed to come up with the $1.85 billion owing on the pipeline after failing to find a suitable buyer. The bankers have since called in Martin Madden and Brian McMaster of Ernst & Young as receivers while Epic appointed KordaMentha as administrators.
For four years Epic has been in an ongoing battle with the state government’s independent energy regulator OFFGar in a bid to charge higher tariffs on the system to support the inflated $2.4 billion the company paid for the pipeline, thought to be $700 million more than the under bidder, which transports gas from Western Australia’s resource rich North West Shelf to Perth and the South West.
Additionally, Epic has been in negotiations for the last year attempting to secure business contracts with the pipeline’s major shippers Alcoa, Alinta and Western Power, in order to make the asset more appealing to any potential bidder.
Two consortiums are now thought to be leading the bidding race, one comprising the Li Ka-Shing-backed utility Envestra and the other comprising Australian Pipeline Trust and Canada's Enbridge, both thought to have made offers of around $1.9 billion.
The WA Government is after a quick sale to support the implementation of a much needed expansion program on the line following a disastrous summer where large sections of Perth faced regular blackouts due to gas shortages.
The banks have advised the Government that receivership could speed up the sale and insisted gas supplies would not be affected by the receivership as the pipeline would continue to be maintained and operated by Epic Energy until a sale was struck.
