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The ERA yesterday rejected a proposed access arrangement from the Goldfields Gas Transmission pipeline owners, further clouding the ability of the owners to raise tariffs in the future. The intitial submission for the five year from the GGT owners was lodged in November 1999. The ERA has suggested a resubmission deadline of January 2006 for an amended proposal.
Despite this decision APA will acquire 100% of the Parmelia business, including the 420km Parmelia pipeline which supplies gas from the Perth basin, associated gas processing and storage infrastructure, and a small gas retail business. APA will also acquire CMS Energy Corporation’s 45% interest in SCP No 1 (SCP).
SCP, which is already 55% owned by APA, owns 88.2% of the 1380km Goldfields Gas Transmission pipeline (GGT) in north-western WA, giving APA operating control of GGT.
”The acquisition of these assets is right on strategy for APA and we believe we’ve got them at a fair price,” said APA managing director Jim McDonald.
“These pipelines will strengthen our core business and the acquisition of Parmelia will allow us to move into gas storage and processing businesses, which is what we have said we intended to do.
“Parmelia delivers gas to industrial areas of Perth and has storage facilities to allow peak supply to the Perth region. The Goldfields Gas Transmission pipeline serves a world-class mineral province and is fully utilised in the short term. There are plans to add capacity via compressors.
“We have repeatedly said that we will maintain our growth rates and build our business by acquiring other transmission lines and ensuring that our existing pipelines are filled. Our success today is a significant step along that path.
“Meanwhile the draft regulatory decision for Goldfields Gas Transmission pipeline released on 29 July 2004 is in line with APA’s expectations of the regulator’s position at this stage in the process.”
The sale will be funded by a combination of cash, existing debt facilities and an equity raising by way of a bookbuild placement of approximately $60 million. APA’s stock has been placed in trading halt while the placement is conducted.
