20 Apr 2020

Increased PKGT capacity approved

Squadron Energy has welcomed a NSW government decision to allow for increased capacity of the Port Kembla Gas Terminal (PKGT).

3 minute read
Liquefied Natural Gas (LNG) Tanker Moored To The Jetty
Liquefied Natural Gas (LNG) tanker moored to the jetty. Photo Credit: Felix Cesare via Getty Images.

Squadron Energy Pty Ltd has welcomed a NSW government decision to allow for increased capacity for the Port Kembla Gas Terminal (PKGT).  The modification to the original development consent will satisfy the market need for more gas during the cooler winter months. It allows an increase in throughput, as well as an increase in the number of LNG cargoes able to be received at the PKGT each year, without modifying the terminal design.

See media release in full below or via the AIE Website.

Modification approval clears way for final gas supply negotiations and agreements

20 June 2020 – Australian Industrial Energy (AIE) today welcomed NSW government approval of its application to modify the existing development consent for the Port Kembla Gas Terminal (PKGT).

The modification to the development consent will allow increased volumes of gas to flow through the PKGT, satisfying the market need for more gas during winter months. This will be achieved by increasing the permitted output of the terminal, as well as increasing the number of LNG cargoes able to be received by the terminal.

With the additional capacity now approved, AIE will continue working with government agencies to complete post-consent requirements and with customers to firm up supply contracts. With firm supply contracts in place, AIE will be able to take its final investment decision and commence the relatively short and simple 14 – 16 month construction program for the PKGT.  

Of the various gas import facilities proposed to service the east coast market, the PKGT is the only terminal with a planning consent. It is also well placed to service both the NSW and Victorian markets.

AIE has appointed a major construction contractor, Spiecapag Soletanche Bachy (SCSB), and secured the Höegh Galleon as the floating storage and regasification unit (FSRU) for the terminal. If customers now commit to supply agreements, making FID possible in 2020, gas could be flowing into NSW as early as 2022. The terminal has the capacity to deliver well over 100PJ of gas each year, representing about 75 per cent of NSW total market needs. It can source LNG supplies from WA, QLD, NT or anywhere in the world offering the most competitive prices.

The approval cements the PKGT’s position as the only project in NSW with a potential timeframe able to assist the NSW state government to meet the terms of its recent MOU with the Commonwealth to support the injection of 70PJ of new natural gas supplies into the market by 2022.

AIE has adopted a highly flexible approach to accommodating customer needs, offering not only long-term fixed schedule supply contracts for industrial customers, but also tolling capacity so large volume customers, such as energy companies, can secure their own cargoes and delivery frequencies. 

Mr Peter Mitchley, the head of AIE’s PKGT project said: “Import terminals can be operational faster and cheaper than on-shore resources. Production rates can be dialled up or down quickly to reflect market demands and the capacity of terminals can, in some instances, exceed volumes available from onshore gas fields. When located in industrial zones, like our NSW Port Kembla site, there is also the added benefit of significantly reduced environmental and community impacts.

“AIE welcomes the NSW government’s approval and looks forward to working with our customers to secure a reliable, affordable supply of gas for the businesses, electricity generators and households who will need it as we move into economic recovery post COVID-19,” he said.

The project:

Australian Industrial Energy (AIE), formed in 2017, is a consortium comprised of: Australian businessman Andrew Forrest’s Squadron Energy Pty Ltd; major Japanese trading and investment company, Marubeni Corporation; and JERA Co.Inc, the world’s largest buyer of LNG. A $250m project, PKGT has NSW government approval to supply more than 75 per cent of NSW’s gas needs.  The terminal will be located at Port Kembla, near Wollongong.

Get in contact with Squadron Energy.

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