Gas Companies Bought For $150 Million
The OIO has approved Elgas Limited (United States of America 69%, Europe Region 11%, United Kingdom 9% and Various 11%) for the “acquisition of the assets, business and registered trademarks of On Gas and up to 70% of the Shares in Liquigas”. The vendors are On Gas Limited (New Zealand 97%, Various 3%); Vector Limited (New Zealand 97%, Various 3%) and Vector Investment Holdings Limited (New Zealand 97%, Various 3%). The price paid was $150 million.
The OIO said: “The Applicant is a New Zealand registered company, ultimately owned by Linde PLC, an Irish multinational company. The Applicant supplies liquefied petroleum gas (LPG) to commercial and residential customers. The Applicant is acquiring interests in New Zealand gas related companies On Gas Limited and Liquigas Limited in order to expand its New Zealand business. On Gas Limited is one of New Zealand’s largest wholesale and retail gas retailers and resellers. Liquigas Limited is a nationwide distributor of LPG from LPG producers to LPG wholesalers. Consent was granted as the Applicant has met the investor test criterion”.
In 2018 the previous Labour-led coalition Government banned oil and gas exploration outside of onshore Taranaki, as part of New Zealand’s contribution to action against climate change. The 2023 change of Government has led to an obsessive reversal of everything enacted by its predecessor, including this ban. The National-led coalition Government announced its planned reversal in 2024.
“Natural gas production fell by 12.5% in 2023 and a further 27.8% in the first three months of 2024, triggering a nationwide energy shortage as generators switched to more coal and diesel to power the grid, Energy Minister Simeon Brown said. Renewables including hydro, solar and wind were not making up the shortfall, the Government said” (Reuters, 27/8/24).
But passing a law and seeing results any time soon are two different things. “The Government’s own advice on repealing the oil and gas exploration ban says no new gas fields are likely to be discovered and developed in the next ten years. The latest modelling, urgently released under the Official Information Act and obtained by RNZ, says in the short-term repealing the ban is unlikely to significantly bolster gas supplies from existing fields, either. That makes the climate impacts of the law change smaller, but also shrinks any expected impact on the energy market”.
“Resources Minister Shane Jones has sold the law change as being needed to keep gas flowing and ‘keep the lights on’, after supplies from existing gas fields dwindled sharply this year (2024). He responded to the latest modelling today by saying the repeal was ‘long term thinking’ and a ‘contingency’ in case big growth in renewable energy did not pan out”.
“‘I really ask Kiwis to conceive this change to be in the vein of providing a contingency option, so this does represent another arrow in the quiver. Asked if any new gas would arrive in time to make a difference, Jones said ‘you have to take a long-term view’. He said ‘no-one predicted’ when Jacinda Ardern banned exploration in 2018 ‘that we would be dependent on Indonesian coal’”.
“Asked if he thought existing gas fields would be producing more gas today – allowing less coal use – if it were not for the ban, he said: ‘Well, there’s the geological reality in terms of existing fields’. He said the prospect and timing of any new gas supply ‘lies at the centre of a whole lot of conflicting forces’, but there would be no legal impediment to it happening”.
No New Gas Before 2035 Anyway
“In response to RNZ’s reporting, Greenpeace posted on X/Twitter that: ‘All that talk about ‘keeping the lights on’ was always just a smokescreen. The Government’s own advice was that repealing the exploration ban would likely see no new gas before 2035 anyway’. According to the modelling, the main short-term impact of allowing companies to explore for new supplies of fossil fuels off the New Zealand coast appears to be giving them the confidence to extend the life of their existing gas fields in the future. Those fields are already operating under existing permits”.
“The analysis shows Government officials believe that undoing the ban will encourage fossil fuel companies to release more of the gas available to be extracted from their existing fields. That’s because officials think those companies will have more confidence in investing in oil and gas, without the ban. The Crown Minerals Amendment Bill reverses a 2018 ban on exploring for new oil and gas fields, and makes other changes to make fossil fuel exploitation more attractive”.
“Carbon emissions from the law change are now projected to be much smaller than previously suggested, because of the long timeframe before any significant boost to gas supply. Originally, the Ministry for Business, Innovation and Employment’s (MBIE) climate impact assessment found undoing the ban would result in an extra 51 million tonnes of planet-heating emissions being pumped into the atmosphere in the years to 2050”.
“That is almost as much greenhouse gas as New Zealand’s economy as a whole produces in a year. Short term, MBIE originally estimated that between now and 2035, moves to encourage oil and gas extraction would add 14 million tonnes of carbon dioxide emissions to the country’s tally, roughly the amount of greenhouse gas New Zealand’s cars and trucks produce in a year”.
“However, the latest modelling estimates just 1.6 million to 2.4 million tonnes of extra emissions – total – could be released out to 2035 as a consequence of undoing the ban. Officials tested the impacts of two scenarios: companies successfully tapping 30% of what is known as ‘contingent reserves’ of gas (gas in existing fields, that can be extracted under existing permits) versus companies extracting 60% of those reserves”.
“The lower emissions figure is if 30% can be extracted and the higher figure is if 60% of those reserves are produced. New Zealand’s emissions are expected to rise as a result of undoing the ban, even after taking into account the fact that electricity companies may burn less coal if they can secure more gas. That’s because the added emissions from burning more gas outweigh any savings from burning less coal”.
“In MBIE’s words, ‘the repeal of the oil and gas exploration ban may lead to greater investment in existing gas fields’. The analysis concluded: ‘The repeal may also mean that new gas field supply is discovered and developed, increasing supply further. However, this is unlikely to happen before 2035 and is outside the scope of this exercise’”.
“As a result of the longer timeframe to see any significant boost to existing gas fields, the analysis says impacts on greenhouse gases are also smaller than previously estimated, in a climate analysis prepared in May (2024). ‘The key difference is the expected timing of when contingent reserves can be converted to supply’”.
“‘We have assumed that contingent reserves may extend the lifespan of existing fields but are not likely to significantly raise short-term production’, said MBIE. The analysis said in all scenarios, the modelling assumed gas prices would rise ‘to within the range of the cost of importing liquefied natural gas (LNG)’” (RNZ, 30/9/24)
Linde’s Misdeeds
As for Linde, the transnational corporation which is the ultimate owner of Elgas Limited, an online search for “Linde scandals” came up with this summary: “Linde, a global industrial gases company, has faced several controversies and scandals, including a False Claims Act settlement for customs duty evasion, allegations of abusing its market position, and asset freezes in Russia, leading to scrutiny and legal action. Here’s a breakdown of the key issues”:
- “Customs Duty Evasion: Linde agreed to a $US22.8 million settlement of a whistleblower lawsuit, resolving allegations that it evaded US customs duties by making false statements on customs declarations regarding imported materials for chemical and natural gas plants between 2011 and 2017”.
- “Allegations of Market Abuse: Hong Kong’s antitrust watchdog claimed Linde’s refusal to supply medical gases to a rival was an ‘object’ abuse, meaning no further analysis was needed to show the impact on competition”.
- “Asset Freezes in Russia: Following the invasion of Ukraine, a Russian court ordered the freezing of nearly $US500 million of Linde UK assets, including claim rights over gas plants, bank accounts, securities, and real estate, due to concerns about enforcing future judgments in Russia”.
- “Linde and Praxair Merger: In 2019, the US Federal Trade Commission approved a modified final order requiring industrial gas suppliers Praxair, Inc. and Linde AG to sell assets in nine industrial gases’ product markets in numerous US geographic markets to four divestiture buyers”.
- “Linde’s Exit from DAX Index: Linde’s exit from Germany’s DAX index (stock market blue chip index) was partly due to DAX rules capping a company’s weight at 10% of the total value of all index members, which Linde regularly breached”.
- “Linde’s Violation Tracker: The Violation Tracker Website provides a summary of Linde’s regulatory penalties in more than 50 other countries”.
In NZ Linde Trades As BOC
In October 2018 the OIO approved Linde Plc acquiring 100% of the shares of Linde AG and Praxair Inc. The price paid was $650.6 million. The OIO stated that the newly created company Linde Plc sought consent to merge and combine the businesses of Linde AG and Praxair Inc., two transnational industrial gas companies, into Linde Plc.
“Once the merger is complete, Linde Plc will have assets of $NZ64.6 billion and will be one of the four largest industrial gas companies in the world…. The Linde Group (Linde AG) is a Munich-based transnational chemical company founded in 1879. It is the world’s largest industrial gas company by market share as well as revenue. Praxair, Inc. is the largest industrial gases company in North and South America, and the third-largest worldwide by revenue. BOC Industrial Gases NZ is a member of The Linde Group that supplies compressed and bulk gases, chemicals and equipment through 100+ retailers in New Zealand”.
The full November 2024 Decisions are at
Ingka Investments Forest Assets NZ Limited and Ingka Investments Management NZ Limited