Reuters: Shell-BG Deal May Shake Up Rival Australian LNG Plans

Tightening gas supplies in eastern Australia and a battle for gas to supply three liquefied natural gas plants will figure largely in watchdogs' review of Royal Dutch Shell's $70 billion takeover of BG Group .

The deal may help break a deadlock over coal seam gas owned by Shell's Arrow Energy in Australia, which has been stuck in the ground after it scrapped plans to build an LNG plant in Queensland and entered talks to supply other LNG plants there.

Shell hopes Australia's competition and foreign takeovers watchdogs will take that into account when weighing the potential benefits to the economy and consumers in the eastern states, whose gas costs have soared as supplies have been diverted to LNG exports.

"There's a strong, compelling industrial logic for what now needs to happen in South Queensland. I'm sure that the Australian government and the regulators will pay attention to it as well," Shell CEO Ben van Beurden told reporters on Wednesday. MORE