The Australian Competition and Consumer Commission’s (ACCC) Gas inquiry 2017–2030 Interim report has confirmed that Energy Projects and Infrastructure Korea (EPIK) has declared its proposed Newcastle LNG import terminal as ‘economically unfeasible’, with development activities ceasing in September 2022.

Elaborating further on this decision, EPIK noted that the “volatility of the international LNG market and high LNG benchmark pricing” had “placed a downward pressure on the economics of the project”.

The project was to include a 72 kt LNG Floating Storage and Regasification Unit (FSRU), and LNG bunkering facilities moored in the port of Newcastle at a cost of US$430 million. It was forecast to be capable of supplying more than 80 per cent of NSW’s current gas demand, with the potential to increase throughput as demand required.

The Newcastle GasDock project was given critical project status by the NSW Government in 2019.

The ACCC report stated the risk posed by conditions in the international LNG markets is not unique to EPIK. Rather, all the proposed LNG import terminals are exposed to this risk.

It said while the development of LNG import terminals in the southern states may be required to address future gas shortfalls and provide for more flexible supply, it is “possible that other proposals could be abandoned, or delayed until conditions improve”.

ACCC said AIE’s Port Kembla terminal is the most progressed amongst the proposed terminals, although AIE has stated that supply may not commence until 2026 based on prospective buyers’ demand.

“Other import terminal proponents made a similar observation about prospective buyers not seeing a need for LNG imports until 2026.

“High LNG prices and demand for floating storage and regasification units (FSRU) in the wake of the Russia-Ukraine war are placing pressure on some of the proposed terminals and could result in proposals being abandoned as occurred with EPIK’s Newcastle terminal, or delayed.”