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NGC to acquire UnitedNetworks' gas pipeline asset

23 August 2002

Commission clears National Gas Corporation (NGC) to acquire UnitedNetworks' gas pipeline assets

The Commerce Commission has today cleared Natural Gas Corporation Holdings Limited to acquire the gas pipeline assets of UnitedNetworks Limited.

Commission Chair John Belgrave said the Commission is satisfied that the proposed acquisition would not have, nor would be likely to have, the effect of substantially lessening competition in the North Island markets for the transmission, distribution and retailing of gas in various regional markets. While the acquisition would expand the number of regions in which NGC is vertically integrated, the Commission considered that there were sufficient constraints on the merged entity that the acquisition would be unlikely to give rise to a substantial lessening of competition.

Mr Belgrave added: "The Commission also considered the aggregation of the gas distribution networks in the Whangaparoa area, and concluded that given the current minimal competition at the distribution level, there is no risk of a lessening of competition.

"The Commission considered whether the transaction would reduce the potential for lower gas prices for some customers as a result of bypass pricing, and concluded that the opportunities for bypass in the future were unlikely to be significantly affected.

The Commission will release a public version of its decision shortly. It will be posted onto the Commission's website, www.comcom.govt.nz/adjudication or will be available on request from Catherine Best, (04) 498-0953.

Background NGC owns and operates the natural gas transmission pipelines in the North Island, is a distributor and retailer of gas in Northland, Waikato, Bay of Plenty, Taupo, Gisborne, Hutt/Mana and Kapiti, and a retailer of gas in Taranaki. NGC also has a 25% interest in the Wanganui/Rangitikei gas distributor and retailer, Wanganui Gas Limited.

UNL owns and operates natural gas distribution pipelines in Auckland, Hawkes Bay, Palmerston North/ Manawatu and Wellington.

Ends


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