Wesfarmers to sell LPG and LNG distribution businesses to Supagas and Clean Energy Fuels Australia

Wesfarmers is offloading its LPG and LNG distribution businesses in separate deals but holding on to its flagship Kleenheat electricity and retailing business.

Wesfarmers Chemicals, Energy and Fertilisers on Thursday announced that after 65 years of ownership, its LPG distribution business would be sold to Supagas, and, after 20 years’ ownership, its LNG business to Clean Energy Fuels Australia.

The sale price has not yet been disclosed and the deals are subject to a series of approvals, including from the Australian Competition and Consumer Commission.

Pending those, the LPG deal is expected to finalise by September and LNG by November.

“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 WesCEF managing director Ian Hansen.

“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.”

Kleenheat’s natural gas retailing business — a key service to households and businesses across the Perth and Geraldton to Bunbury areas — will remain part of the WesCEF portfolio with plans to continue growing its market position.

Also remaining are Kleenheat’s electricity business and LPG and LNG production facility in Kwinanna.

The LPG distribution business delivers LPG cylinders and bulk LPG across the State and into the Northern Territory under the Kleenheat brand.

Supagas, the proposed new owner, is the nation’s third-largest supplier of LPG and focuses on medical, helium, specialty and industrial gases. It already has a presence in WA and the NT and the company is said to be keen to strengthen its business, expanding further in LPG.

The LNG business, known better as EVOL LNG, delivers the gas for industrial, transport and power generation use. Perth-based Clean Energy Fuels Australia, the proposed buyer, develops small LNG infrastructure assets.

It is primarily focused on WA’s mining sector, providing remote mining customers with energy options.

Mr Hansen said both new owners recognised the strength of WesCEF’s distribution networks and its 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,” he said.

Mr Hansen earlier this month announced his intention to retire in November, with chief operating officer Aaron Hood appointed to take the reins at WesCEF.