Page 9 - GLNG Week 48 2020

GLNG COMMENTARY GLNG

NSW on track to begin

LNG imports by 2023

The state’s proposed Port Kembla import terminal is
closer to being realised after developer AIE signed a

new infrastructure agreement with Jemena

PROJECTS & AUSTRALIA’S New South Wales State is The EGP is currently capable of delivering
COMPANIES another step closer to importing its first liquefied 360 TJ (9.38mn cubic metres) per day of gas
natural gas (LNG) following Australian Indus- from Longford in Victoria’s Gippsland region
WHAT: trial Energy (AIE) and Jemena’s new agreement to Sydney and Canberra.
Jemena has agreed to to develop essential pipeline infrastructure. Jemena has said it will modify the EGP to be
connect the terminal to The two companies announced on Novem- able to deliver more than 200 TJ (5.21 mcm) per
its Eastern Gas Pipeline ber 27 that they had signed a memorandum of day of gas from NSW into the Victorian market,
(EGP). understanding (MoU) to connect AIE’s Port while being able to supply up to 450 TJ (11.72
Kembla terminal project near Wollongong to mcm) per day to NSW. This will represent a 25%
WHY: Jemena’s Eastern Gas Pipeline (EGP). Moreo- increase on its current capacity.
The pipeline is major ver, Jemena also intends to upgrade the EGP’s Squadron CEO Stuart Johnston said AIE’s
trunk pipeline that capacity while installing new equipment to MoU with Jemena would lead to the provi-
will also open up the allow it to pump gas to Victoria. sion of 522 TJ (13.6 mcm) per day of transport
Victorian market. AIE, which is wholly owned by Squadron capacity.
Energy, aims to begin delivering imported gas The deal comes just weeks after AIE
WHAT NEXT: supplies to NSW consumers before the end announced the signing of an up to 25-year
The project faces rising of 2022. If and when the terminal does come lease agreement with NSW Ports, paving the
competition from a online, and Jemena’s pipeline upgrades are in way for construction work to begin. AIE said
number of other supply place, the project will be able not just to sup- it would start the site handover process imme-
projects. ply NSW but also Victoria, whose gas supply diately and that, once construction began, the
crunch is projected to arrive earlier than in project should be wrapped up within 18-20
other East Coast gas markets. months.
While the Port Kembla project promises to “We believe we have secured the best site
help resolve the East Coast’s looming gas sup- in Australia for this project and now with an
ply shortfall, which the Australian Energy Mar- agreement for long-term tenure for the site and
ket Operator (AEMO) has warned could first a pipeline agreement secured, the [Port Kembla The prospect
emerge in Victoria in 2023, the project is not terminal] remains the only project in the eastern
being developed in a vacuum. states capable of assisting the NSW state govern- of other supply
In fact, while there are four other import pro- ment to overcome predicted gas shortages by options on the
jects on the drawing board – though none quite 2024,” Johnston said last week.
as advanced – there are also two major new Jemena managing director Frank Tudor said: horizon could
unconventional gas projects in development in “[This project] is not only the quickest and most
NSW and the Northern Territory. The prom- efficient way of bringing additional gas to mar- tempt buyers –
ise of being able to deliver gas within a couple ket ahead of forecast shortages, but it will also
of years should win over a fair portion of Port help to place downward pressure on gas prices correctly or not
Kembla’s target customer base, but the prospect and stimulate much-needed economic activity – to hold out for
of other supply options on the horizon could across regional NSW.”
tempt buyers – correctly or not – to hold out for The Port Kembla project, which car- a better offer.
a better offer. ries an estimated price tag of AUD250mn
($184.45mn), involves the development of a gas
In the pipeline terminal, a floating storage and regasification
As part of its agreement with AIE, Jemena unit (FSRU) and wharf facilities.
has pledged to invest more than AUD70mn
($51.65mn) in first building a 12-km under- Supply concerns
ground pipeline to connect the LNG terminal to The project is expected to supply more than
the EGP and then modifying the trunk line to be 75% of NSW’s annual gas needs – around 100 PJ
able to pump gas south of the NSW border. (2.6bn cubic metres) – by the end of 2022. This

Week 48 04•December•2020 www. NEWSBASE .com P9