GASCOR Pty Ltd

Full description

In 1991, the Government commissioned a study aimed at improving the performance of the Gas and Fuel Corporation (VA 1040). As a result of this study (Cresap, October 1991, Strategic and Organisational Review Final Report for the Gas and Fuel Corporation of Victoria) the Gas and Fuel Corporation was restructured into discrete business units such as corporate, transmission, distribution, retail and Heatane Gas.

The Gas Industry Act 1994 (Act No. 112/1994) was introduced to enable the complete corporatisation of the former Gas and Fuel Corporation. This legislation resulted in the further restructure of the Gas and Fuel Corporation into two parts. The Gas Transmission Corporation (GTC) - later renamed Transmission Pipelines Australia which was the manager of the main high-pressure gas pipelines and GASCOR, which operated the low pressure distribution assets, the gas retail function, consulting services and the Gasmart appliance retail business.

GASCOR was established on 20 December 1994 and continued to trade as the Gas and Fuel. The former Gas and Fuel Corporation was formally wound up on 21 June 1995.

Section 15 (1) of the Gas Industry Act 1994 set out that the functions of GASCOR were:
"(a) to operate pipelines (whether or not owned by GASCOR) for the distribution of gas through distribution pipelines;
(b) to undertake, or provide for the undertaking of--
(i) the distribution of gas through distribution pipelines;
(ii) the storage of gas;
(iii) the planning and execution of projects for constructing or operating distribution pipelines or for the storage of gas;
(c) with the approval in writing of the Minister to undertake, or provide for the undertaking of--
(i) the conveyance of gas through transmission pipelines;
(ii) the planning and execution of projects for constructing or operating transmission pipelines;
(d) to explore for gas and other petroleum products;
(e) to develop and produce gas and other petroleum products;
(f) to supply and market gas and incidental goods and services; and
(g) to trade in gas."

In March 1997, the Government announced the decision to restructure GASCOR. Under the restructure, GASCOR's functions were allocated across a number of new entities.

The Gas Services Business Pty Ltd was established to operate the information technology systems, the customer call centre and a number of other GASCOR services. The Office of Gas Safety (VA 4029) was established by the Gas Industry (Amendment) Act 1997 (Act No. 36/1997) as an independent statutory authority, which would perform the safety functions previously undertaken by GASCOR.

Another part of the restructure was the creation of three new gas distributors that would own and maintain the existing low pressure distribution and to construct network extensions, as well as three new gas retailers that would sell gas directly to consumers. The retailers were to purchase the gas from GASCOR, who would continue to be the contracting counterparty with Esso/BHP.

Each distributor would own pipes in a defined geographical area and have a related retailer. The three gas distributors were Stratus Networks, Multinet and Westar. The retailer attached to Stratus Networks was Energy 21, which covered parts of eastern Melbourne, the Mornington Peninsula and northern and eastern Victoria. The retailer related to Multinet was IKON Energy, which covered central metropolitan Melbourne and the south-eastern suburbs. The retailer attached to Westar was Kinetik Energy which covered Melbourne western and north-eastern suburbs as well as western and north-central Victoria. Gasmart was to be owned equally by the three gas distributors.

The new gas distribution and retail businesses commenced operations as divisions of GASCOR on 1 July 1997, were fully corporatised in December 1997, and sold to the private sector in the first half of 1999.

Stratus Networks and Energy 21 were purchased by a consortium made up of Boral Energy and Envestra Limited. Envestra was a new company, which had previously been owned by Boral. An agreement between the two companies meant that Envestra owned and operated Stratus Networks (which became known as Envestra) and Boral owned and operated Energy 21. In February 2000, Boral's energy business was split from its building materials and construction business. The new energy company was listed on the stock exchange and became known as Origin Energy.

Westar/Kinetik Energy was purchased by Texas Utilities. Gas and electricity was then provided by the TXU brand, which came about after the merger of Eastern Energy (an electricity provider) and Kinetik Energy.

Multinet/IKON was purchased by The Energy Partnership, which was a 50:50 joint venture between AMP Asset Management and UtiliCorp United, a gas and electricity utility from the USA. The management contract for both Multinet and IKON was awarded to United Energy. In June 2000, The Energy Partnership joined with United Energy, Shell and Woodside Energy to form Pulse Energy Pty Ltd. The Energy Partnership owned 25% of Pulse. In July 2002, the Australian Gas Light Company (AGL) acquired Pulse.