Both Elgas and Vector (through its wholly owned subsidiary, OnGas) are active in the wholesale and retail supply of LPG. LPG is typically supplied throughout New Zealand to customers either in cylinders (eg, 9kg, 15-20kg, or 45kg) or in bulk by truck to dedicated storage tanks at the end user's site. It is also supplied to some customers through localised reticulated networks. At the wholesale level, Elgas and Vector compete nationally to supply LPG to large commercial customers and resellers. At the retail level, Elgas and Vector compete to supply LPG to residential and business customers in a number of regional markets across New Zealand.

Liquigas provides upstream distribution and logistics for LPG in New Zealand. It has LPG storage terminals in four locations across New Zealand, from which it distributes LPG. Wholesalers, such as Elgas and Vector, purchase LPG directly from domestic and overseas LPG producers (being natural gas and crude oil companies who produce LPG as a by-product), and then use Liquigas to transport LPG to their facilities around New Zealand. Elgas currently holds 18.7% of the shares in Liquigas, while Vector (through its wholly owned subsidiary Vector Investment Holdings) currently holds 60.25%.

A public version of the clearance application will be available shortly on the Commission’s case register.

Background

We will give clearance to a proposed merger if we are satisfied that the merger is unlikely to have the effect of substantially lessening competition in a market.

Further information explaining how the Commission assesses a merger application is available on our website.