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    Australia's Wesfarmers to divest LPG, LNG distribution businesses


Excluded from the divestment is Kleenheat’s natural gas retailing business.

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Liquefied Natural Gas (LNG), Corporate, News By Country, Australia

Australia's Wesfarmers to divest LPG, LNG distribution businesses

Sydney-listed Wesfarmers has agreed to sell its liquified petroleum gas (LPG) and LNG distribution businesses to Supagas and Clean Energy Fuels Australia (CEFA) respectively, the company announced on May 30.

The divestments are independent of each other and 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. This segment will remain part of Wesfarmers. Additionally, Kleenheat’s electricity business and its LPG and LNG production facility in Kwinana will continue to be part of Wesfarmers, as will the Kleenheat brand.

Wesfarmers’ LPG distribution business delivers LPG cylinders and bulk LPG to residential, dealer networks, business, and industrial customers across Western Australia and the Northern Territory. Operating under the Kleenheat brand, the business covers four metropolitan and six regional sites.

The new owner, Supagas, is the third-largest LPG supplier in Australia and operates over 48 manufacturing, branch, and distribution centers nationwide, focusing 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. The sales completion date for the LPG distribution business is expected to be September 2024.

Wesfarmers' LNG distribution business operates under the Evol LNG brand, providing LNG for transport, power generation, and industrial applications. For CEFA, acquiring Evol LNG aligns with its goal of becoming a significant energy transition platform in Australia, Westfarmers said. The completion date for the LNG sale is expected to be November 2024.

“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,” said Wesfarmers Managing Director Ian Hansen.

The financial details of the deal were not disclosed.