GAC official clarifies reasons to reject GASCO’s bid to acquire 55% of Best Gas Carrier

Logo of GASCO

The General Authority for Competition (GAC) is keen on market stability, Al Ekhbariya TV reported, citing Talal Alhogail, Head of Mergers and Acquisitions Analysis at GAC.

Commenting on GAC’s rejection of the National Gas and Industrialization Co.’s (GASCO) acquisition of a 55% stake in Best Gas Carrier Co., Alhogail noted that the acquisition percentage must be less than 40% in order to prevent monopoly.

GAC studied the supply chain in Saudi Arabia’s gas market, which has six links.

The first is production, which is carried out by Saudi Aramco, while GASCO holds a monopoly on four links in the supply chain, namely, transportation, storage, filling, and wholesale.

The last is retail sale, which is a competitive activity involving 1,149 companies. Best Gas Carrier is one of the largest companies in this field.

Accordingly, GASCO’s acquisition will make it difficult for another competitor to enter the Saudi market. This is against the Ministry of Energy’s objectives, which include attracting new players, Alhogail highlighted.

The Ministry of Energy is currently working on a new system to attract new investors to the supply chain (storage, filling, and wholesale), in order to encourage market competition.

Alhogail pointed out that the GAC is keen to have several players in this market, in line with global trend of liberalizing market supply chains.

According to data compiled by Argaam, GAC announced yesterday, June 15, rejecting the request received from GASCO to acquire a 55% stake in Best Gas Carrier. 

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