Chapman Tripp has advised Gas Services NZ on the $200m acquisition of the Ahuroa Gas Storage Facility from Contact Energy, in a deal completed on Monday.
The Ahuroa Gas Storage Facility is an underground natural gas storage facility situated in Taranaki, which has been used by Contact Energy to date for its own gas storage needs. Gas Services NZ, which is affiliated with gas pipeline owner First Gas, will operate the Ahuroa Gas Storage Facility as Flex Gas.
Chapman Tripp partner John Strowger and senior solicitor Tom Jemson acted for Gas Services NZ on all aspects of the transaction.
“The transaction was complicated for numerous reasons. It involved the acquisition of a unique asset and required the parties to agree long term commercial arrangements to govern Contact Energy’s future use of the facility, in addition to the acquisition documentation.
“Further, achieving completion of the transaction required the parties to satisfy a number of conditions precedent, including obtaining Ministerial consent under the Crown Minerals Act and consent under the Overseas Investment Act,” Strowger said.
Strowger said the transaction presents new opportunities for both Gas Services NZ and Contact Energy going forward.
He said Gas Services NZ will work to expand the Facility within two years of completion to provide gas producers, shippers and end-users more flexibility to manage their energy needs.
For Contact Energy, the transaction allows it to pay down debt while also ensuring that it continues to be able to store gas at the Ahuroa Gas Storage Facility.
The transaction represents the third significant investment in New Zealand by First Gas and its affiliate, Gas Services NZ, with First Gas previously acquiring Vector’s North Island gas transmission network and certain distribution networks, and the Maui gas pipeline, in 2016.
Gas Services NZ has also recently announced a further investment being the purchase of the Rockgas business from Contact Energy, which remains subject to regulatory approvals.