Australia’s Origin Energy aims to become the sole user of Venice Energy’s FSRU-based LNG import terminal in the Port of Adelaide, South Australia.
Origin, which in March agreed to a takeover offer from a consortium consisting of Canada’s Brookfield Asset Management and a unit of US-based energy investor EIG, has a 27.5 percent share in the Australia Pacific LNG export plant on on Curtis Island near Gladstone.
According to a statement by Venice Energy issued on Friday, the two firms have agreed on a structural framework that will underwrite the commercial viability of the Outer Harbor LNG import terminal.
The agreement comes 18-months after the project received approval by the South Australian government and will see Origin become the single user of the terminal for a minimum of 10 years, with further extension options available, Venice Energy said.
Moreover, the company’s managing director Kym Winter-Dewhirst said Venice Energy’s subsidiary Venice Regas and Origin will now enter into an exclusivity arrangement that will allow for the completion of a fully-formed terminal use agreement “over the coming weeks”.
“This is a major milestone for this project and ensures that the stage 1 enabling works will
begin shortly,” Winter-Dewhirst said.
He said the project’s approvals allow up to 110 petajoules per annum of LNG to pass through the terminal and into local and interstate gas networks, “thereby reducing forecast gas shortages in the southeast of Australia from mid-2026 and beyond.”
Venice Energy expects first gas from the facility to flow into the network by May 2026 following a period of commissioning.
GasLog to convert LNG carrier to FSRU
Winter-Dewhirst told LNG Prime in September that the company expected to take a final investment decision on the project by early October.
Earlier this year, Venice Energy estimated it could reach FID on the proposed LNG terminal in the Outer Harbor by the end of August.
Last year, Japanese trading and investment house, Marubeni, has signed a memorandum of understanding with Venice Energy to join the latter’s FSRU-based LNG import project.
Venice Energy said at that time that as part of the deal with Marubeni it would create a joint venture partnership for its A$260 million ($165 million) project under development in South Australia.
The terminal will include the development of two berths in the Outer Harbor channel, along with the FSRU, cryogenic piping, as well as associated infrastructure.
Venice Energy claims the LNG terminal will be the first in the world to operate exclusively on renewable energy.
The company signed a heads of agreement with Greece’s GasLog in July 2021, under which the latter would supply an FSRU for the project.
In January this year, Paolo Enoizi, CEO of Greek LNG shipping firm GasLog said that company has agreed in principle to convert one of its 145,000-cbm steam LNG carriers to an FSRU and charter it to Venice Energy.
“Such conversion is expected to cost in excess of $100 million and take between eight to 10 months,” Enoizi said.