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Viva seeks partners for Victorian LNG project
AUSTRALIA
AUSTRALIAN fuel distributor Viva Energy has begun seeking potential partners for its planned lique ed natural gas (LNG) import terminal in Victoria.
e company said on July 6 that it was open to expressions of interest (EoIs) from companies interested in helping to build the terminal, which is a key component of Viva’s proposed Geelong Energy Hub project. e company announced in June that it wanted to develop its existing re nery in Geelong into an energy hub that could address a predicted gas supply shortfall on the country’s east coast.
The Australian Energy Market Operator (AEMO) has warned that Victoria could expe- rience gas shortages from as early as 2023 – with the rest of the eastern and southern states to fol- low shortly therea er.
Viva said this week that, following the suc- cessful completion of the terminal’s initial tech- nical studies, the way was clear to begin the front-end engineering and design (FEED) phase this year.
Company CEO Scott Wyatt said the busi- ness was looking to form commercial strategic
partnerships with other companies that could support the development of both the terminal as well as the wider energy hub.
e energy hub project includes the extension of the re nery’s existing pier and the installation of mooring facilities for a oating regasi cation and storage unit (FSRU), with a capacity to meet around half the state’s total gas demand. Potential gas supplies could come from existing gas export projects around Australia, with Wyatt saying: “We hope to be able to bring gas from Austral- ian production elds to where it is needed so that the whole country can enjoy the bene ts of our vast resources and help bring energy prices down by increasing supply and competition.” e project will also involve laying around 6.5km of underground pipeline to transport gas to the existing grid. A solar farm is slated for develop- ment and the company is mulling alternative fuel production.
Wyatt said: “Viva is currently assessing the feasibility to establish a solar energy farm on sur- plus re nery land and the potential for gas- red power generation and hydrogen production to support this emerging sector.”
Importer JERA carries LNG losses
JAPAN
JAPAN’S JERA said that falling power demand and its oil-indexed supply commitments had caused it to write o billions of yen in expected revenue from LNG sales in the nancial year to March 2020.
JERA president Satoshi Onoda said on July 9 that slumping prices meant it expected the one- o losses to continue throughout 2020, despite trying to hedge its supply commitments, Reuters reported.
“ e coronavirus pandemic reduced electric- ity demand by 12% in April and May from what we had anticipated earlier,” Onoda said.
To cope with falling fuel demand from the weaker electricity sales, JERA has been taking measures to cushion LNG losses.
“We have made adjustments, including changing shipping schedules and reselling sup- plies to third parties, so that our LNG invento- rieswouldnotover owuntilautumn,”Hisahide Okuda, JERA’s director said.
Asian spot LNG prices LNG-AS have more
than halved so far this year, and are signi cantly below the average price Japanese buyers pay under oil-linked contracts.
e sudden fall in demand for LNG exposed Japan’s importers to higher priced oil-linked long-term contracts, which contrast with low spot prices caused by oversupply and the coro- navirus (COVID-19) inspired falling demand.
JERA’s losses include more than JPY10bn ($90mn) from the resale of LNG cargoes for the past nancial year and the current one. It also forecasts further losses in future as it is com- mitted to making purchases under long-term contracts.
However, JERA, which is owned by Chubu Electric Power and TEPCO, posted a net pro t of JPY168.5bn ($1.6bn) for the year to March, up from JPY22.5bn ($209mn) in 2018-19.
e company said its pro ts were driven by its generation business, which it acquired in 2019 by buying power stations run by TEPCO and Chubu Electric.
Week 28 15•July•2020 w w w . N E W S B A S E . c o m P7
