May 04, 2020 [Pipeliner – Published on April 28, 2020] – Australian Industrial Energy (AIE) says a 2020 final investment decision (FID) is possible after a capacity increase was approved for its Port Kembla project.

The New South Wales Department of Planning, Industry and Environment announced planning approval to increase the capacity of the Port Kembla Gas Terminal (PKGT) today, with AIE saying the LNG import terminal will be able to deliver well over 100 PJ of gas to customers each year.

Department Executive Director Energy, Resources and Compliance Mike Young said demand from domestic gas users will be high.

“The modification means that the terminal will now be better able to match gas supply with the seasonal demands in both the industrial and retail market, particularly during the wintertime,” said Mr Young.

“The modification also includes an increase to the number of ships that can deliver LNG to the terminal which will allow for more flexibility in the delivery schedule.”

AIE said it was continuing to work with customers to firm up supply contracts, with construction to take 14-16 months once an FID was made.

“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,” said AIE PKGT Project Head Peter Mitchley.

“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.”

Although a number of import terminals have been in development along Australia’s east coast as gas producers look to manage potential supply shortages over the next decade, PKGT is the only project with planning consent thus far.

The company has appointed Spiecapag and Soletanche Bachy to construct the project and has secured the Höegh Galleon as the terminal’s floating storage and regasification unit (FSRU).

AIE said it could be supplying gas to market as early as 2022.

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