First Gas announced today that its sister company, Gas Services New Zealand (GSNZ), has completed the purchase of LPG business, Rockgas, from Contact Energy Ltd (Contact) for $260 million.
First Gas chief executive Paul Goodeve said the acquisition complemented the gas transmission and distribution company’s existing business, enabling it to meet customer demand for gas regardless of location.
“Rockgas is an exciting opportunity for Gas Services New Zealand and First Gas.
“It fits well with our long-term investment approach, which is to diversify our domestic gas offering and grow our business. It will also enable us to use our knowledge, expertise and resources to promote LPG, so we are looking forward to Rockgas joining us.”
Earlier this month, GSNZ was given approval by the Overseas Investment Office (OIO) to purchase Rockgas from Contact. Based in New Plymouth, First Gas is an Australian-owned natural gas transmission and distribution company. OIO approval was a requirement of the sale.
While Rockgas will be owned by GSNZ, it will be run as part of the First Gas group.
Rockgas is the largest LPG retailer in New Zealand, with a market share of approximately 41%. It serves 88,000 customers from seven branches and a network of 28 franchises throughout the country.
As part of the transaction, GSNZ has offered employment to all employees within Contact who work exclusively on LPG – about 130 staff. The Rockgas name will remain and Rockgas’ franchises around New Zealand will be unaffected by the purchase.
“For Rockgas customers, staff and franchisees it will remain business as usual,” Mr Goodeve said.
Under the terms of the sale, Contact will continue to sell LPG to its mass market customers, while also providing back office services to GSNZ after the sale. GSNZ, a dedicated gas infrastructure company, will operate the fulfilment side of the business by sourcing LPG, and picking up, refilling, and delivering it to the mass market. In addition, GSNZ will directly manage bulk LPG customers, and supply branches and franchises.
Based in New Plymouth, GSNZ’s sister company First Gas is New Zealand’s largest owner and operator of gas networks, with more than 2,500km of high pressure gas transmission pipes and about 4,800km of gas distribution pipes in the North Island. First Gas’ focus is a safe, reliable supply of gas to more than 65,000 customers throughout the North Island.