Gas pipeline firm Jemena has signed a deal with Australian Industrial Energy to connect the latter’s proposed Port Kembla LNG import terminal in New South Wales to the Eastern Gas Pipeline.
The project development agreement comes after the duo signed a memorandum of understanding to work together in November last year.
Jemena’s managing director, Frank Tudor, said the agreement formalizes arrangements between the duo. Jemena will now invest in a capital spend program to progress development of a 12km gas pipeline to connect the EGP to the LNG import terminal.
The firm expects first gas flow in early 2023.
“The ACCC recently identified a potential for a gas shortfall of around 30 petajoules from as early as 2024 unless an LNG regassification terminal or speculative resources are developed. This project is the most advanced, and best way, of helping to meet this shortfall and will bring additional gas to Victoria and NSW before this deadline at globally competitive prices,” Tudor said.
One of several LNG import developments
AIE, owned by Australian businessman Andrew Forrest’s Squadron Energy, has previously secured the Hoegh Galleon as the project’s FSRU, but the firm still needs to take a final investment decision.
In addition, Japan’s JERA and Marubeni said in October they have sold their stakes in the FSRU project to Squadron Energy, which now develops the import facility solo.
The Port Kembla terminal, claimed to be Australia’s first LNG import facility, will have the capacity to deliver over 100 petajoules of natural gas each year. This represents about 75 percent of NSW total market needs, according to AIE.
It could source LNG supplies from Western Australia, Queensland, or anywhere else in the world, the firm said.
The project competes with at least five other developments aiming to import LNG into southeast Australia, including the most recent announcement by Dutch Vopak that plans an FSRU in Victoria.
They are all looking to plug the expected gas supply gap in Victoria and NSW.