Australian Industrial Energy (AIE), a subsidiary of Squadron Energy, has signed a long-term lease with NSW Ports for the Port Kembla gas terminal (PKGT) in New South Wales, Australia.
The site, at an existing port, is 6 km from the existing Eastern Gas Pipeline (EGP) which runs between Victoria and NSW. The lease initially runs for ten years with the option to extend to 25 years. PKGT, Australia’s first gas import terminal, comprises a floating storage and regasification unit (FSRU) and associated infrastructure, and is expected to cost A$250 million (€154 million). AIE will now start a site handover process, with construction expected to take just 18–20 months. With construction on track, it will have the capacity to supply more than 75% of New South Wales’ gas needs by the end of 2022.
The New South Wales state government recently signed an MoU with the Commonwealth to inject an additional 70 petajoules of gas into the Austrialian east coast market to meet predicted shortfalls. AIE has pledged to meeting the strict requirements of the development consent granted by the state government, including the environmental guidelines relating to the marine environment, over the lifetime of the project.
‘We have long recognised Port Kembla as the best site for this critical gas project and with the lease for the terminal now agreed, commercial arrangements around future supply contracts can be accelerated with confidence,’ says Squadron Energy CEO Stuart Johnston.
AIE is also looking to build at a dual fuel LNG-Hydrogen 800 MW power station in the Illawarra region, which will initially run on gas from the PKGT.
‘Our commitment to delivering Australia’s first gas terminal is about reinforcing grid reliability today and investing in carbon-free technologies that support a more rapid decarbonisation of the economy,’ says AIE chairman Michael Masterman.
Squadron Energy, part of Australian investment group Tattarang, took full control of AIE in October after buying out former project partners JERA and Marubeni, and said at the time that it would focus on accelerating the development of PKGT.