Australia blocks bid for gas pipelines

A $9.4 billion bid by Hong Kong-based CK Group for the gas pipeline operator APA Group has been blocked by Australia’s government on national security concerns, a decision that has the potential to further inflame diplomatic tensions with China.

“I have advised the consortium led by CK Asset Holdings Ltd. of my preliminary view that its proposed acquisition of APA Group would be contrary to the national interest,” Australian Treasurer Josh Frydenberg said in a statement Wednesday.

His view was based on concerns that a sale would lead to an undue concentration of foreign ownership by a single company group in one of the country’s most significant gas-transmission businesses. Frydenberg said he would make a final decision within two weeks.

The decision would scuttle the conglomerate’s biggest overseas deal, which would have given it control of pipelines that deliver about half of Australia’s natural gas.

Rising electricity prices and blackouts have made energy security a political issue in Australia.

Prime Minister Scott Morrison, who served as treasurer before replacing former Prime Minister Malcolm Turnbull in August, has blocked several deals involving China-linked companies in the past three years, drawing ire from the government in Beijing.