Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) today announced it has agreed to sell its liquified petroleum gas (LPG) distribution and its liquified natural gas (LNG) distribution businesses to Supagas and Clean Energy Fuels Australia (CEFA) respectively.
The divestments are independent of each other, and each is subject to certain consents and approvals including from the Australian Competition and Consumer Commission.
Excluded from the divestment is Kleenheat’s natural gas retailing business, which services households and businesses across the metropolitan and Geraldton to Bunbury areas. It will remain part of WesCEF and continue to grow its strong market position as WA’s born and bred natural gas retailer. Kleenheat’s electricity business and its LPG & LNG production facility in Kwinana will also remain a part of WesCEF, as will the ‘Kleenheat’ brand.
LPG
WesCEF’s LPG distribution business delivers LPG cylinders and bulk LPG to residential, dealer networks, business and industrial customers across WA and the Northern Territory. The business operates under the ‘Kleenheat’ brand across four metropolitan and six regional sites.
The prospective new owner, Supagas, is the third-largest LPG supplier in Australia and operates over 48 manufacturing, branch, and distribution centres nation-wide with a focus on providing industrial, medical, specialty, and helium gases.
Supagas already has a presence in WA and the Northern Territory, and its existing depots will complement those operated by Kleenheat’s LPG business. Supagas is keen to strengthen its business offerings with the acquisition and continue its expansion in the LPG market.
The sales completion date for the LPG distribution business is expected to be September 2024.
LNG
WesCEF’s LNG distribution business falls under its ‘EVOL LNG’ brand and is one of Australia’s leading providers of LNG for transport, power generation and industrial applications.
Acquiring EVOL LNG is CEFA, which is headquartered in WA. CEFA’s mission is to reduce carbon emissions by providing sustainable fuel solutions for power generation and process heat in remote off-grid mines and industrial applications. It is also actively developing renewable power solutions to complement LNG as a firming fuel. For CEFA, the acquisition of EVOL LNG will mean it moves one step closer towards its goal of becoming a significant energy transition platform in Australia.
The completion date of the LNG sale is expected to be November 2024.
WesCEF Managing Director Ian Hansen said the agreement to sell the assets was in the best interests of Wesfarmers’ shareholders and a strong strategic fit with the two buyers of the businesses.
“A key factor in our decision to sell - was the new owners’ commitment to invest in the future of the distribution businesses which will see them continue to grow and succeed,” he said.
“The sale also gives employees and customers of the LNG and LPG distribution businesses the opportunity to become part of growing gas businesses that have access to new markets and technologies and will benefit commercially from economies of scale.”
“Both prospective owners recognise the strengths of our LPG and LNG distribution networks and our people. Potentially, there are 160 people transferring across to the new owners, and the new owners are excited and very keen to take the teams – and the businesses – forward to bolster their respective offerings.”
“The LPG and LNG distribution businesses have been under WesCEF’s ownership for the past 65 and 20 years respectively, and I want to acknowledge our team members whose resilience and hard work has shaped the successful journey of both businesses. I also want to thank them in advance for their continued focus and commitment during the transition to new ownership,” he said.
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Media contact: Peter Carr 0413 019 137, or via email at pcarr@wescef.com.au
About WesCEF’s LPG and LNG distribution businesses
Kleenheat is part of Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) division. EVOL LNG is operated as part of Kleenheat
LPG
Kleenheat, a WA born and bred company, was formed in 1956 to provide WA farming communities with access to reliable energy and appliances. It pioneered the distribution of LPG to regional Western Australia and the Northern Territory, initially sourcing gas from an independent gas plant in Kwinana, until its own Kwinana LPG production facility (KPF) was built in 1988.
The KPF will remain part of Kleenheat and will wholesale LPG to Supagas and other LPG distributors servicing the WA market.
LNG
EVOL LNG primarily sells to remote mining customers in WA for their mine-site power generation requirements, where it offers a competitive and lower carbon intensity alternative to diesel fuel. EVOL LNG builds, owns, operates and maintains all the LNG storage and vaporisation infrastructure at its customer sites which enables natural gas to be supplied to a customer as if it had come from a natural gas pipeline.
EVOL sources its LNG from a process plant constructed in 2008 at the Kleenheat owned and operated KPF. The plant will remain part of Kleenheat and supply LNG under contract to CEFA.