Devaluing Australians’ property? CommBank CAN.

In September, it was reported that a Chinchilla couple were denied a $500,000 bridging loan because their property, which was to be security for the loan, was deemed unacceptable for this purpose. The bank said in an email to the couple that “Long form valuation has revealed 4 coal seam gas wells on the land, making the security unacceptable for residential lending purposes”.

We took a look at the coal seam gas operations, which feed into QGC’s network of wells and pipelines to supply the QCLNG terminal. And you’ll never guess who’s been lending to this infrastructure. Yep, CommBank.

Click here to read a briefing on the couple refused a loan by CommBank, thanks to coal seam gas infrastructure funded by CommBank. 

In the past few years, Commonwealth Bank has participated in the following deals:

  • In November 2012 BG Energy Capital, a subsidiary of QGC’s parent company BG Group, obtained a US$3.04 billion credit facility from a group of 20 banks including CommBank. The financial news source IFR reported at the time that “BG Group is diversifying its sources of financing to back its investment programme including the development of two large projects: Queensland Curtis LNG in Australia and an offshore joint-venture with Petrobras in Brazil”.
  • In December 2014, APA Group obtained a AU$4.1 billion ‘bridge facility’ (a short-term loan used until a company secures permanent financing) from a group of 10 banks including CommBank. The loan was used for the acquisition of QGC’s 543km of pipelines carrying coal seal gas from the Surat basin (including Chinchilla) to the QCLNG terminal.
  • In June 2015, APA Group received US$3.7 billion in long-term debt to replace the bridge facility (above) from a number of banks including CommBank.

While banks tend to not lend to individual gas wells, the infrastructure lending is critical. After all, no LNG terminal, no pipelines. No pipelines, no wells. All of these deals have supported QGC’s efforts to extract unconventional gas from underneath parts of Queensland.

The fact that the Commonwealth Bank email is now in the public domain raises some important questions.

  • How many other people are being denied finance because their property has lost its value due to coal seam gas?
  • How much loss of land value has Commonwealth Bank customers experienced as a result of coal seam gas wells on their properties?
  • If Commonwealth Bank knows that coal seam gas wells devalue Australian land, how does it continue to support the gas export industry, especially when it is undermining its own clients?

They’re all questions we’re hoping the bank will address at its AGM in Perth on the 9th of November. Stay tuned…