Morrison urged to block CKI bid for APA pipeline group

Senator Rex Patrick says Scott Morrison should block Hong Kong-based CK Infrastructure’s $13 billion bid for APA Group.

Centre Alliance crossbencher Rex Patrick. Picture: Gary Ramage.

Centre Alliance crossbencher Rex Patrick says Scott Morrison should block Hong Kong-based CK Infrastructure’s $13 billion bid for APA Group, the nation’s biggest gas pipeline operator, on the grounds it would expand Chinese control of vital energy infrastructure.

In an email to the Treasurer yesterday, Senator Patrick said he held deep concerns about the proposed takeover, which would see a CKI-led consortium ­acquire the east coast’s major gas transmission pipelines at a time when gas prices are surging, adding to CKI’s portfolio which ­includes the major West Australian pipeline.

“My strong view is that the sale of APA to CKI would be prejudicial to our national security interests, as it would further expand Chinese control of vital energy infrastructure,” Senator Patrick said.

He said the takeover also raised serious economic concerns because of APA’s east coast gas pipeline monopoly status at a time when the region’s businesses and households had been hit by surging gas prices.

“On balance, this acquisition should not be allowed to proceed,” Senator Patrick said.

“I therefore request that you exercise your powers under the Foreign Acquisitions and Takeovers Act 1975 to prevent this takeover occurring on the basis that it is not in the national ­interest.”

The Foreign Investment Review Board blocked separate bids from CKI and China’s State Grid for NSW state electricity transmission company Ausgrid in 2016.

But in 2017, the FIRB ­approved CKI’s $7bn bid for DUET, which owned the Dampier-to-Bunbury gas pipeline in WA. The APA takeover would create a Hong Kong-owned pipeline giant with $22bn of ­assets stretching through every mainland state.

CKI, which is run by Victor Li, the son of Hong Kong tycoon Li Ka-shing, and controlled by the Li family, has offered to sell some WA assets to ease competition concerns. CKI declined to comment yesterday.

APA owns the two main pipelines that deliver gas to Sydney. One is from the Santos-operated Moomba gas plant in South Australia and the other from the Bass Strait fields owned by ExxonMobil and BHP.

Yesterday, NSW Energy Minister Don Harwin declined to comment on whether the state had concerns about the bid, after queries to Premier Gladys Berejiklian were passed to his office, saying it was a matter for the FIRB.

Victorian Energy Minister Lily D’Ambrosio also said the matter was one for the commonwealth.

Australian Competition & Consumer Commission chairman Rod Sims also declined to comment.

The ACCC has called for submissions on the bid from potentially affected parties.