The NSW Government has awarded a Development Consent to Australian Industrial Energy’s (AIE’s) proposed Port Kembla Gas Terminal (PKGT), paving the way for a new source of natural gas for the state.
The $250 million PKGT project, which the NSW Government designated as Critical State Significant Infrastructure in 2018, could supply more than 70 per cent of NSW’s gas needs, with first gas scheduled for late 2020.
The timing of AIE’s planned first gas supply into NSW coincides with when supply shortages are forecast to impact existing east coast gas supplies.
This is especially important for NSW as the State currently relies on dwindling interstate supply for over 97 per cent of the gas it uses for both manufacturing processes and electricity generation.
Now with planning consent, the PKGT project forms one of the most advanced proposed liquefied natural gas (LNG) import terminal projects on the Australian east coast.
The project consists of four key components:
- LNG carrier vessels – there are hundreds of these vessels in operation worldwide transporting LNG from production facilities to demand centres.
- A Floating Storage and Regasification Unit (FSRU) – a vessel moored at a berth in Port Kembla’ inner harbour. There are 29 FSRUs in operation around the world and a further 75 in the planning stage.
- Wharf facilities – offloading arms to transfer the LNG from the carrier into the FSRU.
- Pipeline – a standard high-pressure pipeline connection from the FSRU to existing east coast gas transportation network.
AIE has already entered into an agreement with Hoegh LNG to supply the FSRU.
The Port Kembla location was selected after a comprehensive evaluation process by AIE that assessed the long-term industrial nature of the site, port operations, berth configuration, proximity to existing east coast gas transmission infrastructure and AIE’s expected key customer base, as well as strong support from the local community.
The project is expected to create up to 150 local jobs in the construction phase and 40 – 50 permanent roles once the terminal is operational.
It will also underpin approximately 15,000 jobs within the Illawarra region which are dependent on affordable gas supplies.
AIE is expected to use specialised ships as a ‘virtual pipeline’ to transport LNG from a range of sources including domestic Western Australian and global suppliers.
The company has stated that shipping gas this way significantly reduces the transport component of final prices to gas consumers, enabling them to deliver a competitive product.
In commenting on the news this morning, Deputy Premier, John Barilaro said the proposed PKGT will not only be a major boost for the local economy in Port Kembla and surrounds, but will also help to drive down the cost of living across NSW.
“This terminal will make the state of NSW more self-sufficient when it comes to energy and will create greater access to the global gas market,” Mr Barilaro said.
“Cost of living is a huge burden on households across this state, and today’s announcement is another step towards easing that burden by potentially lowering household gas bills in the future,” he added.
