Energy infrastructure company, Jemena, has welcomed steps to prioritise planning approval to develop a new gas connection from its East Gas Pipeline (EGP) to the proposed Liquified Natural Gas (LNG) import terminal at Port Kembla (PKGT).

According to Jemena, the New South Wales Government has placed the PKGT on its Priority Project List which aims to fast-track activities which will support the recovery of the state’s economy during and after the COVID-19 Pandemic.

As part of the project, Jemena is proposing to build a 6 kilometre gas pipeline to connect the proposed Port Kembla LNG import terminal to the 797 kilometre EGP.

At the same time, the company is also looking to make the EGP bi-directional so it can support the flow of gas to Victoria and also expand the capacity to deliver more gas to New South Wales.

Jemena’s Executive General Manager of Gas Markets, Antoon Boey, said they are planning to be shovel ready in the event that the PKGT takes a Final Investment Decision (FID).

“We welcome today’s announcement from the New South Wales Government as a vital step towards expediting this crucial gas project,” said Mr Boey.

“We know many New South Wales and Victorian homes rely on gas for cooking, hot water, and heating and that it is an irreplaceable input into manufacturing and commercial operations in both states. We’ve taken steps to ensure we’re ready to commence construction of our pipeline link as soon as we know the import terminal is proceeding.”

“The proposed upgrades to the EGP are the cheapest way of bringing new gas and competition to New South Wales to help drive down costs.”

Jemena plans to invest $70 million to build the lateral pipeline and modify the EGP.

The proposed upgrades are forecast to enable the pipeline to transport over 200 terajoules (TJ) of gas per day into the Victorian market, while being able to supply up to 450TJ of gas per day to NSW. This would be an increase of over 25 per cent of its current capacity.

These changes, according to Mr Boey, would allow the EGP to meet almost all of Sydney’s gas demand on the coldest day of the year.

The project is forecast to generate more than 180 jobs throughout its development and construction phases.

Mr Boey also acknowledged the support of the New South Wales Government who, in August 2020, fast-tracked approval of the company’s Western Sydney Green Gas project. The $15 million project is exploring how existing gas infrastructure can be used to support renewable gases like hydrogen and biomethane.

“We know natural gas has an important role to play in providing firming power to renewable generation as part of an integrated energy market. At the same time, we’re exploring the role hydrogen and other renewable gases can play in both domestic, transport, and commercial settings,” he said.

Jemena advises that it is ready to commence work on the EGP upgrade project once the Port Kembla LNG import project announces its FID, which is expected before the end of this year.

Jemena’s Western Sydney Green Gas project will commence production of hydrogen gas from the first quarter of 2021.