Page 12 - GLNG Week 27 2021

GLNG ASIA GLNG

SA gas import project advances,

despite challenging market

PROJECTS & SOUTH Australia may be leading the rest of the especially during peak periods, helping to
COMPANIES country in terms of its renewable energy adop- underpin SA’s renewables sector with “firm, dis-
tion rates, but that has not stopped one Austral- patchable energy”.
ian developer from pressing ahead with its plans The state’s demand for gas is falling, however,
to build a liquefied natural gas (LNG) import as solar and wind power panels continue to pro-
terminal in the state. liferate. With power prices in the state reducing
Australian developer Venice Energy has and gas struggling to compete with renewables,
signed a heads of agreement (HoA) with lead- it is an awkward time to be counting on the con-
ing LNG shipper GasLog to negotiate with a tinued demand for imported gas.
charter party for the supply of a floating storage
and regasification unit (FSRU) for the proposed Power down
import terminal. Power and gas utility AGL said this week that
Venice said on July 6 the HoA paved the way it had informed the Australian Energy Market
for the provision of a FSRU that will be moored Operator (AEMO) that it intended to mothball
at Outer Harbour, with GasLog set to provide one of Torrens B thermal power plant’s (TPP)
a technical support crew to operate the facility four generation units for six months.
during its operational life. AGL said on July 7 that the decision fol-
Venice managing director Kym Winter-De- lowed the continued decline in South Aus-
whirst said the HoA was a “major step forward” tralian forward prices and the volume of
for the project, adding “GasLog is a pre-eminent new capacity that has come into the market.
global player in the LNG sector and having their It said “challenging conditions” meant it
involvement in our project is a significant boost was no longer financially viable to operate
for us. They will bring both physical assets and all four units.
technical expertise.” AGL COO Markus Brokhof said: “We have
The developer announced in May that it had assessed all publicly available information and
picked a preferred FSRU supplier, after launch- are confident there is sufficient capacity available
ing the tender in December 2020 and shortlist- to AEMO to ensure system strength.”
ing three offers in March. He added that Torrens Island continued to be
Winter-Dewhirst said at the time: “The an important site for the company’s future gen-
FSRU represents the major proportion of our eration plans, with construction of AGL’s first
operational expenditure, so having it locked grid-scale battery slated to begin later this year.
in at this stage of the project is critical to our The 250-MW battery is part AGL’s plan to build
development and provides us with certainty as 850 MW of batteries in total.
we push ahead with our final round of project AGL said that based upon the TPP’s main-
approvals this year.” tenance cycle it had identified the B1 unit as the
With government and other approvals for the most appropriate to be mothballed and pre-
project due within the next few months, Venice served for recall in October. The utility intends
hopes to reach a final investment decision (FID) to review its decision “should there be material
towards the end of this year and break ground changes to the market conditions”.
shortly after. Construction work is only slated to Gas-fired TPPs are struggling in the face of
last around 12 months, with the facility expected rising solar power capacity in the state, with
to come on stream between the end of next year the Australian Energy Regulator (AER) having
and early 2023. attributed the fall in SA’s wholesale power prices
Venice said the LNG import facility would from AUD122 ($90.53) per MWh in 2019 to
improve and diversify local gas supplies, AUD51 ($37.85) last year.™

P12 www. NEWSBASE .com Week 27 09•July•2021