May 19, 2017

EnergyAustralia today advises it has received a substantial claim against the company related to the sale of the Iona gas storage facility in Victoria to Lochard Energy, a consortium led by investment fund QIC. 

The Iona plant provides gas injection, storage and withdrawal services to both the Victorian and South Australian gas markets. In December 2015 EnergyAustralia completed via competitive tender the sale of its entire interest in the plant to the QIC-led consortium for $1.78 billion. 

The statement of claim brought by Lochard Energy, lodged in the Supreme Court of Victoria on Friday 19 May, alleges certain information on the technical performance of the plant, and on which the consortium relied to make its offer, was incomplete or misleading. Lochard Energy and its shareholders are seeking $967 million or alternatively $780 million in damages from EnergyAustralia.

EnergyAustralia rejects the assertion and will vigorously defend the action. 

In a disclosure to the Hong Kong Stock Exchange CLP Group, the owner of EnergyAustralia, noted that on the basis of currently available information a material outflow of funds for the Group is unlikely.

Since the Iona transaction was completed in 2015 EnergyAustralia and Lochard Energy have had a good and productive relationship. Regardless of the dispute, EnergyAustralia remains committed to working with Lochard Energy to preserve the integrity of the Victorian and South Australia gas market and to maintain reliable and affordable supplies of gas.

For attribution to an EnergyAustralia spokesperson:

“EnergyAustralia is mindful of commenting on legal actions and of the potential impact those comments may have on working relationships, particularly those with counterparties with whom the company envisages an otherwise long and productive association. 

“That means we are inclined to use temperate language to publicly put our response to the claims made by Lochard Energy. We do, however, wish to stress our absolute confidence in our position on this matter and make clear that the phrase ‘vigorously defend’ is not a cliché”.

As the matter is now before the courts EnergyAustralia will not be making further statements at this time.