NSW Government Approves Port Kembla Gas Terminal

Andrew Forrest’s Squadron Energy the world’s biggest buyer of LNG JERA Co and Japanese trading firm Marubeni are behind he plans

Andrew Forrest’s Squadron Energy the world’s biggest buyer of LNG JERA Co and Japanese trading firm Marubeni are behind he plans

Australian Industrial Energy, the joint venture planning to build the berth for a floating LNG import facility at Port Kembla, about 100km south of Sydney, said with the approval in hand it would focus on lining up gas customers.

The Port Kembla project is backed by a Japanese consortium and will cost an estimated $176 million.

"Supply could be increased to around 140 PJ/year-15 PJ/year through a slight increase in LNG delivery schedules and pipeline upgrades", the company says.

The PKGT project could supply more than 70 per cent of NSW gas needs, with first gas scheduled to be delivered to NSW industry by late 2020.

Australian Industrial Energy (AIE), the joint venture planning to build the berth for a floating LNG import facility at Port Kembla, about 100 km (60 miles) south of Sydney, said the approval means it can now focus on lining up gas customers.

AIE is aiming to make a final investment decision around the middle of this year.

In June 2018, the NSW Government declared the PKGT proposal Critical State Significant Infrastructure (CSSI) because of its importance to NSW's future security and reliability of gas supply.

Member for Kiama, Gareth Ward, said the terminal would be a major economic boost for the local economy, with the creation of 150 jobs during construction and up to 50 ongoing roles, once the plant is operational.

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But according to Matt Kean, the State's minister for Energy and Environment, the new Port Kembla Gas Terminal will help NSW ensure a much greater level of energy security.

The development consent announcement makes Port Kembla LNG the first of the five projects to receive a green light from the government.

DPE assessed the proposal, taking into account environmental, social and economic impacts, all community and stakeholder submissions received during exhibition, and advice from Government and independent experts.

Mr Stokes said NSW now relies on interstate sources for 95 per cent of its gas supply and this important project will help achieve energy security into the future.

The timeframe of the project - which is one of five, vying to bring LNG into Australia amidst rising gas prices and supply issues - is planned to coincide with open positions for gas supply agreements, Squadron Energy CEO Stuart Johnston said in a phone interview with S&P Global Platts.

The AIE partners want sales to match the LNG volume that JERA, a joint venture between Tokyo Electric Power and Chubu Electric Power, has agreed to supply.

The development approval paved the way for a new source of gas in time to avert expected gas supply shortages, the AIE said in a statement on Monday.

The PKGT could also support a major injection to NSW's power network with AIE proposing an 800MW Combined Cycle Gas Turbine power station as a second phase of work.

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