Deals

ICG seeks key stake in SEA Gas

The Australia-based infrastructure manager has thrown its hat in the ring with a bid for superannuation fund Rest’s 50 percent stake in gas pipeline owner SEA Gas.

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Australian infrastructure manager Infrastructure Capital Group is in the running for a major stake in gas pipeline owner SEA Gas.

Speaking to Infrastructure Investor, a source familiar with the matter confirmed that ICG had made an indicative bid for superannuation fund Rest’s 50 percent stake in the business during an auction run by Lazard Australia last week.

The auction – said to be the first round in a two-part process, with a second round expected to be held before the end of the month – reportedly involved rival bids for the stake from other Australia-based mid-market infrastructure fund managers, though none have so far been confirmed.

Established in 2002 and responsible for a 700km natural gas pipeline connecting Port Campbell in Victoria to Adelaide in South Australia, SEA Gas also owns and operates the Mortlake Pipeline, which it acquired from Origin Energy in 2016. It is co-owned by publicly listed APA Group, which holds the remaining 50 percent stake and is reported to have customary rights over Rest’s stake in the business.

ICG and APA Group are co-investors in South Australian windfarm Hallet 4, with ownership split between ICG’s Australian Renewables Income Fund (39.9 percent), Osaka Gas Co (39.9 percent) and APA Group (20.2 percent).

ICG’s bid for SEA Gas is not the first time the fund manager has taken an interest in gas energy-related assets. Its portfolio of Australian infrastructure assets includes full ownership of Gas Pipelines Victoria – a 182km pipeline between Carisbrook and Horsham, which it acquired in 2003 – and Tasmanian gas distributor Tas Gas.

Acquired by the firm in December 2019, Tas Gas owns and operates an 837km network of pipelines and is Tasmania’s second largest gas retailer.

Last year, ICG entered into a partnership with French energy giant Engie and Japanese trading house Mitsui to acquire a 75 percent interest in the Australian Renewable Energy Trust, a renewable energy platform. The investment was made through its Australian Renewables Income Fund in a deal understood by Infrastructure Investor to be worth approximately A$400 million (€249 million; $293 million).