Venice Energy is expecting to take a final investment decision to build its FSRU-based LNG import project in the Port of Adelaide, South Australia, by August this year.
Following FID, construction on the project would start in October this year, Venice Energy said in a statement last week announcing the completion of a study with SEA Gas, the owners of the 680 km long pipeline between Victoria and SA.
Venice Energy said that the study confirmed the pipeline can be reconfigured to facilitate bi-directional flow between the states.
This means the proposed LNG terminal in the Outer Harbor at Port Adelaide will ensure that both South Australia and Victoria can secure their gas supplies and avoid shortages, particularly during the peak winter period, it said.
Managing director, Kym Winter-Dewhirst, said in the statement that last season’s gas shortages in the southeast of Australia, particularly in Victoria, “will become a thing of the past once the project becomes fully operational in 2026.”
“Most gas producers, analysts and regulators agree that domestic gas supplies in southeast Australia will fall significantly over the next decade as coal begins to exit the local market and gas becomes the primary back-up for renewable energy due to its intermittent nature,” he said.
“We believe that imported LNG provides insurance to energy supply companies as the nation makes its transition to a low carbon economy over the next 10-15 years and our LNG terminal will play a major role in that transition,” Winter-Dewhirst said.
Venice Energy’s planned terminal can receive LNG from both the Northwest Shelf and Gladstone along with access to international gas supplies, the statement said.
Also, it will provide significant additional storage via its floating storage and regasification unit (FSRU), through the 680 km SEA Gas pipeline and by maintaining storage at the Iona underground storage facility west of Melbourne via regular shipments, especially during peak winter periods, it said.
Marubeni and GasLog
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.
This move came less than two years after Marubeni and compatriot Jera decided to exit Australian Industrial Energy’s Port Kembla FSRU-based import terminal in New South Wales.
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 ($177 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 GasLog Partners 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.
Greek LNG shipping firm GasLog recently entered into a definitive merger agreement with NYSE-listed GasLog Partners.