The Commerce Commission has today discontinued its proceedings against Fletcher Challenge Limited, Fletcher Challenge Energy Limited, Electricity Corporation of New Zealand and Genesis Power Limited in relation to the Kupe gas field following the conclusion of a confidential settlement between the parties.
Commission Chair, John Belgrave, said that the Commission filed its original statement of claim in December 1997. The Commission alleged that by a series of transactions, which are described as the Kupe Acquisition, Fletchers obtained control of the Kupe gas field. Fletchers and ECNZ also entered into a gas supply contract for the supply, from any source, of specified quantities of gas at specified prices ("the Generic Gas Contract"). As a result of these transactions the Commission alleged that Fletchers and ECNZ had breached the Commerce Act.
From the outset all defendants have denied any liability and there has been an ongoing series of challenges to the Commission's proceedings.
Shell has recently acquired the Fletcher Challenge Energy interests. In the context of obtaining a clearance for the acquisition under the Commerce Act, Shell gave an undertaking to the Commission that it would divest all of Fletcher Challenge Energy's interest in the Kupe gas field. . In addition, Fletchers divested their interests in Natural Gas Corporation as from July 1999.
"In these circumstances the Commission now believes that a competitive gas market in New Zealand exists," Mr Belgrave said. "The proceedings have been discontinued accordingly following a satisfactory confidential agreement reached with all the parties involved."
