THE WALL STREET JOURNAL: Australia's ACCC: Won't Take Action On Vopak/Shell Deal (ShellNews.net)

DOW JONES NEWSWIRES

August 23, 2004 9:55 p.m.

Posted 24 August 04

CANBERRA -- Australia's competition watchdog said Tuesday it won't take action over a storage lease agreement between Vopak Terminals Sydney Pty. Ltd. and Shell Australia.

Independent fuel importer and wholesaler Trafigura Australia had claimed to the Australian Competition & Consumer Commission that it was being pushed out of the storage site at Sydney's Port Botany.

The Port Botany lease held by Trafigura, which supplies leaded and unleaded fuel and diesel to independent distributors and retailers, expires at the end of the month.

Shell Australia, a unit of Royal Dutch/Shell Group (RD), will acquire the 65,000 cubic meters of storage to keep jet fuel and other petroleum products.

"The ACCC conducted market inquiries to determine the impact on competition in the wholesale and retail petroleum markets and has come to the view that the Vopak/Shell arrangements would not substantially lessen competition for the purposes of the Trade Practices Act 1974," commission chairman Graeme Samuel said in a statement.

He also said that should the ACCC oppose the leasing of the terminal space by Shell , "it is likely that the...storage would remain unused."

Further, the ACCC's market inquiries revealed that as major independent retailers have sought longer-term contracts with the domestic refiner/marketers in order to protect their operations, independent imports have become less viable.

The loss of these contracts made it difficult for independent importers to develop a profitable business case for the leasing of the Vopak facilities, said Samuel.

-By Veronica Brooks, Dow Jones Newswires;

61-2-6208-0901; veronica.brooks@dowjones.com

-Edited by Paul Godby