Announcement

TRANSACT: VCT: Sale of Vector's Kapuni Assets 10:13a.m. 
VCT  
03/12/2019 10:13  
TRANSACT  
NOT PRICE SENSITIVE  
REL: 1013 HRS Vector Limited  
 
TRANSACT: VCT: Sale of Vector's Kapuni Assets  
 
SALE OF VECTOR'S KAPUNI ASSETS AND ENTRY INTO NEW LONG TERM NATURAL GAS AND  
LPG SUPPLY ARRANGEMENTS  
 
Vector has agreed to sell Vector's Kapuni gas treatment plant to Todd  
Petroleum Mining Company Limited ("Todd"). The Kapuni gas treatment plant  
processes all the gas produced from the Kapuni field in South Taranaki. Todd  
holds the licence to extract petroleum products from the Kapuni field and  
owns gas extraction assets for the field on a site adjoining the Kapuni gas  
treatment plant.  
 
The transaction resets the relationship between Todd and Vector and creates  
strong alignment in the parties' interests in seeing the Kapuni field further  
developed. New natural gas and LPG supply agreements will provide Vector with  
long term access to these products.  
 
On completion of the transaction:  
o Vector will transfer the Kapuni gas treatment plant and associated assets  
it owns to Todd, including its 50% share in the Kapuni Energy Joint Venture  
(an electricity and steam co-generation plant located within the Kapuni gas  
treatment plant)  
o Vector staff at the plant will transition to Todd employment  
o Todd will pay consideration for acquisition of the plant and associated  
assets over the life of the Kapuni field based on a formula that takes into  
account the field production at Kapuni and processing of LPG and other  
products  
o Vector and Todd will terminate the existing Kapuni Gas Contract and enter  
into new long term agreements for the supply of natural gas and LPG from Todd  
to Vector. The new contracts will commence from 2021 with agreed interim  
terms applying between the parties for the supply of natural gas and LPG  
until this time.  
 
As part of the transaction, the parties have agreed to settle all current  
litigation related to Kapuni gas as at completion. In the period to  
completion this litigation will be suspended.  
 
Vector will receive cashflow over time and the impact to the financials is  
expected to not be material in the short term. Longer term, the amount Vector  
receives for the transaction will vary depending on several factors including  
the amount of reserves in the Kapuni field and the timing of any further  
development of the field by Todd.  
 
Completion of the transaction is subject to a number of customary conditions  
including the approval of the Minister of Energy and Resources. Subject to  
meeting these conditions, the transaction is expected to complete in the  
second quarter of 2020. Vector will be working with Todd over the coming  
months to ensure a smooth transition.  
 
ENDS  
 
Investor contact  
Jason Hollingworth, Chief Financial Officer, Vector  
Jason.hollingworth@vector.co.nz, 021 312 928  
 
About Vector  
Vector is New Zealand's leading network infrastructure company which runs a  
portfolio of businesses delivering energy and communication services to more  
than one million homes and commercial customers across the country. Vector is  
leading the country in creating a new energy future for customers and  
continues to grow and invest in the growth of Auckland, and in a wide range  
of activities and locations. Vector is listed on the New Zealand Stock  
Exchange with ticker symbol VCT. Our majority shareholder, with voting rights  
of 75.1%, is Entrust. For further information, visit www.vector.co.nz  
End CA:00345358 For:VCT Type:TRANSACT Time:2019-12-03 10:13:04  

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