By James Paton Sept 17, 2015: BLOOMBERG.COM
Royal Dutch Shell Plc’s $70 billion deal to buy BG Group Plc could reduce the supply of natural gas to local customers in Australia and boost prices, according to the nation’s competition regulator, which delayed a decision on the agreement until November.
The transaction may decrease the incentive for Shell’s Arrow Energy venture with PetroChina Co. to feed gas to the domestic market, the Australian Competition and Consumer Commission wrote in a statement on Thursday. That’s because it would allow Shell to send the Arrow supplies to BG’s Queensland Curtis liquefied natural gas project on the east coast, which is super-cooling the fuel for export to customers in Asia.
The regulator has been studying the Shell agreement amid a broader review of the gas market on the east coast. Local gas buyers such as fertilizer maker Incitec Pivot Ltd. have worried about a supply shortage and surging prices, with Shell’s proposed purchase of BG adding to concerns. About $60 billion is being spent in Queensland state on LNG developments.
“The arrival of the major LNG projects has upended the east coast gas market, likely permanently,” Rod Sims, chairman of the commission, said in a copy of a speech to be given in Sydney. “Gas user complaints about a dearth of offers for the supply of gas in recent years are largely true.”
The BG deal is on track to be completed in early 2016, Shell’s Australian unit wrote in an e-mail response to questions. The companies will continue to work closely with the regulator on the review, according to the statement.
Queensland Projects
The Australian competition regulator has invited further submissions on the Shell deal and now plans to make a final decision Nov. 12. The takeover has received regulatory approvals from the U.S., Brazil and the European Union, while Shell also needs clearance from China.
Shell and PetroChina have been looking at alternatives for their Arrow gas project after shelving plans to build an export terminal due to cost blowouts and slumping energy prices. Santos Ltd. and a ConocoPhillips venture with Origin Energy Ltd. are also building LNG plants in Queensland.
“The ACCC’s preliminary view is that the proposed acquisition will align Shell’s Arrow interests with BG’s interest in QCLNG, which may see Shell prioritize supply to LNG,” Sims said.
The regulator in its statement acknowledged that domestic supply agreements probably won’t be sufficient to underpin the development of the Arrow gas resources and that the company would want to obtain “high-volume, long-term contracts” given the significant costs to tap the reserves.
Rising Prices
The review shouldn’t be a “major impediment” for Shell, Graeme Bethune, chief executive officer of consulting firm EnergyQuest in Adelaide, said by phone. “The Shell-BG deal could accelerate the development of the gas. Having the development is better than not having the development.”
Still, the Shell deal “potentially further consolidates gas reserves” on the east coast of Australia, where a small group led by the Queensland LNG projects control about 90 percent of the supplies, Australian manufacturer Adelaide Brighton Ltd. wrote in documents lodged with the ACCC in July.
Wholesale gas prices in Australia are forecast to double over the next two years as a significant amount of the supplies in east Australia are committed to exports, Australia & New Zealand Banking Group said in a July report.
The Shell accord is “unlikely to increase the ability or incentive of Shell to foreclose supply of gas to rival LNG plants because the merged entity would only supply a small share of the global LNG market,” the ACCC said.
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
