July 16, 2024 [Storage Terminals Magazine]- The announcement of a major expansion to Victoria’s Iona underground gas storage facility has been warmly welcomed by Venice Energy, the developer of an LNG import terminal in South Australia.

Kym Winter-Dewhirst, chair of Venice Energy, stated that the 25-year agreement between Snowy Hydro and Iona facility owner, Lochard Energy, ensures the South Australian terminal can cover any forecasted gas shortfalls in both Victoria and South Australia.

“This is a strategic move by the Federal Government through Snowy Hydro, as it guarantees sufficient gas storage at Iona, thereby preventing state-wide blackouts amid declining domestic gas supplies in the next few years,” said Winter-Dewhirst.

Winter-Dewhirst emphasised the critical question of gas supply sources, explaining that the gas will be supplied from Venice Energy’s terminal at Port Adelaide via the 687km SEA Gas pipeline directly linking Adelaide to Iona.

“We will deliver around 60 petajoules per year directly to Iona, with an additional 30 PJs to the Port Campbell pipeline and around 20 PJs remaining within the South Australian network,” he detailed.

Winter-Dewhirst highlighted the importance of securing new gas supplies to cover forecast shortfalls and ensuring this imported gas is competitively priced compared to the rising costs of domestic gas as local production declines.

“We believe our $300 million LNG import terminal at Port Adelaide can meet these requirements, ensuring both security of supply and cost-effective gas pricing, supporting the transition from coal towards a net-zero future,” he said.

Venice Energy also revealed that the Victorian expansion project coincides with a formal offer from a major international infrastructure developer to become the balance sheet partner and fully underwrite the South Australian terminal project.

Following eight months of discussions with various companies, Venice Energy has identified a leading contender and entered formal negotiations. They expect to finalise the legal and commercial elements of the agreement within the next 6-8 weeks, declare FID following the signing of the deal, and begin construction later this year.

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