Coal seam gas was a business that had trouble being taken seriously here a decade ago, but now it’s just about the year’s hottest takeover territory in an industry that has featured disproportionately in the M&A games.

The latest instalment in the takeover mania is Santos offering $606 million this morning for Queensland Gas. The price of $1.26 a share is a 47 per cent premium to the average over the past three months.

The deal though could be yet another handicap to Oil Search’s hopes of landing its PNG gas in Australia. The coal seam suppliers have been working hard to undermine any sense of urgency about the need for PNG supply. This spend by Santos is one more factor mitigating against any early commitment to take PNG gas.

Gas and gas pipelines were once rather boring businesses, but with Alinta lighting an acquisitive fire under the pipelines, not to mention the ability to charge fees for the infrastructure management, it’s all become rather hot and hectic. Explosive, you might say.

Peter Fray

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