Energy infrastructure owner APA Group is confident it can ease concerns raised by the competition watchdog over its bid for EnergyAustralia's Iona gas storage plant in Victoria.
The Australian Competition and Consumer Commission says the proposed deal could reduce competition in the Victorian gas market and allow APA to raise its east coast supply chain charges.
"We are confident that the issues raised by the ACCC are able to be dealt with fully, and we intend to engage with the ACCC to prove our position," an APA spokesman told AAP.
APA runs Australia's largest gas infrastructure business and is considered a leading contender in an ongoing auction process by EnergyAustralia to sell the plant for up to $1 billion.
The bidding process, run by investment bank Lazard, was previously expected to be completed in September, but this is likely to be pushed back several months as the ACCC gathers more information.
The consumer watchdog has invited further market submissions by October 16, and now expects to make a final decision by November 5.
It said the proposed acquisition may raise competition concerns in the supply of gas storage services to customers in Victoria.
"Following the proposed acquisition, APA would own most of the options for customers of gas storage in Victoria," ACCC chairman Rod Sims said.
The ACCC has also identified potential concerns arising from combining Iona with APA's large existing portfolio of gas storage and transmission infrastructure throughout the east coast.
"The proposed acquisition, by giving APA access to more complete information along the supply chain, may allow APA to increase transmission and storage charges as compared to an alternative acquirer," ACCC said.
APA said it remains in discussion with the vendor regarding the sale process.
The Iona gas plant uses underground reservoirs to store gas for peak demand periods, and can supply up to 500 terajoules of gas a day into the Victorian and South Australian markets.
It holds contracts with several large retailers and power generators, and reported $80 million in earnings before interest, tax, depreciation and amortisation in 2014.
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