China moves to assert control over Australian energy network

Pays A$3 billion for control of the main gas network in much of eastern Australia.

The sum paid by the State Grid Corporation of China also went to purchase a one-fifth interest in SP AusNet. State Grid is the largest utility in China and the world with total revenues of US$266 billion in 2011.

The move paves the way for State Grid to gain full control of SP
AusNet, which operates electricity and gas networks in Victoria, along with the balance of Jemena Gas Distribution’s gas distribution assets in New South Wales and Queensland.

State Grid has agreed to pay A$824 million for 19.9% of SP AusNet, leaving Singapore Power with 31.10%.

Jemena is the brand name of SPI (Australia) Assets Pty Ltd for its operations within Australia. It is an Australian energy infrastructure company owned by Singapore Power.

State Grid also bought a 60% stake in Jemena for more than A$2 billion. Jemena has assets valued at A$9 billion and substantial borrowings.

The purchase gives State Grid control of the Eastern Gas Pipeline, which links Bass Strait with Sydney and the Queensland Gas Pipeline that runs from Roma to Gladstone and Rockhampton, along with other assets, such as half of the ACT's energy supplier and recycled water assets in Sydney.