The Commerce Commission today cleared Natural Gas Corporation of New Zealand Limited (NGC) to acquire the gas trading assets of Taranaki gas and electricity utility, Powerco Limited.

Commissioner Dr Kate Brown said that the gas trading assets NGC's is seeking to acquire are Powerco's customer lists and existing contracts to supply those customers. Powerco would retain ownership of its network and customer meters.

Dr Brown said that the Commission is satisfied that, should the acquisition go ahead, NGC would not acquire or strengthen a dominant position in any of the three relevant markets. Those are the markets for:

1. transmission of natural gas in the North Island;

2. wholesaling of natural gas in the North Island; and

3. retailing natural gas to small commercial and domestic customers connected to Powerco's gas network.

The Commission is satisfied that this proposal would not affect NGC's established dominant position in the transmission market.

The proposal would result in the retailing of gas on Powerco's network being separated from the distribution of that gas. This replicates what is happening in the electricity sector and the Commission anticipates that it would be likely to facilitate competition in the gas retail market.

There would be a small amount of aggregation of market share in the North Island wholesale market, but the Commission considers that the presence of other suppliers in this market, such as Contact, Shell/Todd, Enerco and TransAlta, means that there would be no acquisition or strengthening of dominance in this market.

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets.

Parties can apply for a clearance, which will be granted if the Commission is satisfied that dominance is not acquired or strengthened. A clearance, if granted, protects an acquisition from legal action under the Act.

Media contact: Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958

Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz