THE FIRB and Josh Frydenburg need bear in mind at the forefront of the “national interests” is Australia’s sovereignty!
The precedent set by Ausgrid is clear! CK Consortium is the same group that bid for Ausgrid!
Federal LNP MP Craig Kelly DESPITE conceding the national security concerns being raised were well founded has suggested that if Australia sells off our gas pipelines to the Chinese it will enable expansion… BIZARRE!
Of course the Chinese would like to gain control of our gas resources … they have our Ports!
WHY is the ALP silent on this? Has anyone heard anything from them?
Chinese gas deal: National security concerns could be eased if it invests in local market, argues Liberal MP
A Federal Liberal MP has suggested a Chinese and Hong Kong based consortium hoping to buy large swathes of the nation’s gas pipelines could allay national security concerns by committing to invest in the sector, as security analysts urge the government to block the deal.
The Foreign Investment Review Board (FIRB) is considering the CK consortium’s $13 billion bid for APA Group, which owns tens of thousand of kilometres of pipelines, gas mains, storage facilities and processing plants across the country.
Some of the companies in the CK consortium were blocked, along with China’s state grid owner, from purchasing Ausgrid, the owner of New South Wales’ electricity poles and wires, over national security concerns.
The company already has significant financial interests in Australia, including in SA Power Networks.
Peter Jennings from the Australian Strategic Policy Institute argued any takeover would give CK control of around 70 per cent of the nation’s critical energy infrastructure.
“I think that’s a vulnerability to have so much critical infrastructure in the hands of, or essentially at the control of Chinese companies, or companies that can’t escape the influence of the Chinese Communist party,” he said.
“We’ve got to be concerned about the ability to do damage to Australian critical infrastructure if we ever found ourselves in a situation where we might be in a very difficult relationship with China.”
Mr Jennings argued the precedent set by FIRB in the Ausgrid deal was clear.
“In a lot of cases, and increasingly so as a matter of fact, gas is also now used as part of electricity generation, so the two networks are intimately connected,” he said.
“If it’s good for Australian electricity infrastructure to say, well, that’s about as far as we can allow foreign ownership to go, the same thing really is true now, I think, for gas infrastructure as well.”
APA Group’s assets include the major gas pipelines linking the Moomba gas fields to the east coast gas network.
Liberal MP Craig Kelly, chair of the Coalition’s energy committee, suggested there could be ways for CK to make its bid for APA Group more palatable.
“Perhaps, if they weren’t taking such a large stake holding, perhaps if they were going to sell part of the network off to increase competition, perhaps if they were looking at doing some substantial investment in new network, that could perhaps change the equation,” Mr Kelly said.
Mr Kelly said any change in attitude towards the investment would depend on what any investment in expanding the network would look like.
“There are substantial opportunities, I think, in Australia to expand our gas pipelines,” he said.
“The potential to run a pipeline through to the east coast, to put that into the east coast pipeline, would be a significant game changer for the nation, but I think every time that it’s been looked at, the economics haven’t added up.”
“We’ve got all that gas that is actually on sort of the wrong side of the continent, over on the north west shelf and in Darwin.”
Government won’t comment while FIRB continues deliberations
Mr Kelly said any decision by FIRB to block the deal would not impact Australia’s position as a haven for foreign investment, suggesting there were special circumstances when dealing with the sale of critical infrastructure.
He added the national security concerns being raised were well founded.
“In the past, most of our investment has been from our Five Eyes partners — the UK and the USA,” he said.
“Now we’re looking at investment from nations that we don’t have those historical ties to.
“I think that’s why the public has a greater concern, and I think it’s correct that government should also have a greater concern.”
FIRB will advise Josh Frydenberg on whether to approve the deal, in what will be the Treasurer’s first major foreign investment test.
A spokesman for Mr Frydenberg said the Treasurer does not comment on matters being considered by FIRB.
Resources Minister Matt Canavan was reluctant to pass any judgment, but gave an insight into the Government’s thinking.
“We are, and have significantly reformed regulation of gas pipelines. And we need to make sure, in any transaction, that we maintain our sovereignty to be able to continue to properly regulate pipelines,” he said.
“We haven’t shied away from making the tough decisions to say no to foreign investment where we don’t think it’s in Australia’s national interests.
“I’m sure our national interests will be at the forefront of Josh Frydenberg as he makes his decision.”
The Australian Competition and Consumer Commission gave the merger the green light, after CK promised to sell off some of APA’s assets in WA.
But the Commission was only looking at the takeover with regards to how it affects the market, noting APA is already effectively a monopoly operator of gas transmission assets and saying a change in ownership would have little impact on competition.
APA Group declined to comment on the matter.