QLD GOVT ANNOUNCES WIN-WIN SALE OF ALLGAS

Joint statement

The first downpayment for the Queensland Future Growth Fund was announced today with the signing of agreements for the sale of the Allgas distribution business.

The Queensland Government has today entered into a contract for the sale of the Allgas distribution business to Australian Pipeline Trust (APA), Acting Premier, Treasurer and Minister for Infrastructure Anna Bligh announced today.

“The announcement of the sale by the Queensland Government is a major milestone in the energy sale processes,” the Acting Premier said.

The sale is first of a series of energy asset sales announced by the Government in April of this year including the Allgas distribution network, Sun Retail (ENERGEX’s electricity retail arm), Sun Gas (its gas retailing business) and the commercial parts of the Ergon Energy’s electricity retail business.

Ms Bligh said that the Government had received strong interest in the Allgas distribution business given the nature and size of the assets being offered by the Government. Six bidders were short listed as part of a quality field of bidders with a number of bidders lodging final bids of over $500 million.

“The purchase price of $521 million (exclusive of stamp duty of $14 million) received from APA represented an outstanding result for Queensland taxpayers. In addition, APA demonstrated the ability to manage the assets and a strong commitment to the expansion and development of the Allgas network,” the Deputy Premier said.

APT’s track record as a strong performer in the Australian gas market is reflected in the price paid.

“On any measure the State has received a good price for Allgas.

“The purchase price of $521 million compared favourably to the regulated asset base of $303 million (as at June 2006) growing to $447 million (as at June 2011).

‘This is a win-win for Queensland and APA.

Geoff Wilson, the Minister for Mines and Energy said that APA’s proposed investments will help expand the gas market in South-East Queensland and facilitate competition and employment.

The terms of the sale include APA taking on the current management team and key staff of 35 people.

This will be coupled with a 12 to 18 month Transition Services Agreement (TSA) with ENERGEX Limited where approximately 42 operations and maintenance staff will provide a range of services to Allgas. APA has stated its intention to ensure offers are made to these ENERGEX staff working on the gas distribution network.

Any employees not offered a job will remain with Energex, so this sale will proceed without any job losses.

The Allgas distribution business – which is being sold - includes a 2,398km regulated gas distribution network that operates in South East Queensland and northern New South Wales.

The network supplies over 65,000 consumers and has a peak maximum daily capacity in excess of 35,700 GigaJoules.

Allgas also owns an unregulated gas pipeline in Central Queensland that delivers gas to a single large industrial consumer and an easement from Gatton to Gympie for potential future development.

The sale amount will be the first deposited in the Queensland Future Growth Fund.

Ms Bligh said that as previously announced, that Fund is about reinvesting in our furture.

“It will be invested in essential infrastructure such as dams and weirs and to support the continued sustainable development of clean coal technology

“As well as in our GOCs to maintain infrastructure capacity, by expanding the rail and port networks vital to taking our exports to the country and the world.

The establishment of the Fund gives Queensland a whole new opportunity to focus on the future and meet some of the new challenges we face in the 21st Century.

“The Government is committed to ensuring a smooth and efficient sale process and this is the first instalment in the energy asset sales process,” the Acting Premier said.

Media contact: Deputy Premier's Office 3224 4379