Country Energy, the NSW Government-owned energy retailer and distributor, yesterday announced its decision to sell the gas network it operates in southern New South Wales.

The Country Energy gas network supplies natural gas to Southern NSW towns including Wagga Wagga, Tumut, Adelong, Cooma, Bombala and Gundagai through 1,100 kilometres of distribution mains and 65 kilometres of transmission pipelines.

According to the company, the decision to dispose of the gas network was taken as operating the gas network is not core business for Country Energy. The timing of this announcement is interesting given that the whole of Country Energy is on the block as part of the NSW Government’s privatisation process. However, as we reported on 20 February, the NSW Government placed the privatisation process on hold until least the end of June.

Energy companies AGL and Origin Energy are the most obvious buyers as they already operate the main gas networks in NSW. However, as both these companies are bidders in the NSW privatisation process one might reasonably question their appetite at this point in time. ActewAGL, the joint venture between AGL and ACTEW, might also be a potential buyer given its strong presence in Southern NSW.