Sydney — South Korea-based EPIK has signed a preliminary deal for the development of an LNG import terminal at Australia's Port of Newcastle, the fifth proposal to import LNG into the country, where growing LNG exports have resulted in supply imbalances and rising domestic gas prices.
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Rising LNG exports from Gladstone in the neighboring state of Queensland, combined with gas development restrictions and an oil price-driven slump in upstream investment, have led to growing concerns over gas shortages on Australia's east coast, but questions remain over whether this market can accommodate five separate LNG import projects.
Australia does not currently import any LNG and is tipped to become the world's largest exporter of the fuel in 2019.
The Newcastle LNG project will include a 170,000 cu m floating storage and regasification unit and associated onshore infrastructure, and will be located within the Port of Newcastle, to serve the state of New South Wales' gas market, where natural gas prices remain higher than Asian LNG prices, EPIK said in a statement Wednesday. The Platts JKM for deliveries in January was assessed at $9.119/MMBtu Wednesday.
EPIK is expected to provide more information around the project timeline in the next few months, a company spokesman said Thursday.
"It would be premature to identify any particularly source of LNG at this stage. I can share that EPIK is engaged in discussions with a number of potential project partners and third parties involved in developing and executing LNG projects, including engineering companies, shipbuilding companies and international LNG trading and utility companies," he said.
The Newcastle LNG project is also exploring the possibility of supplying LNG for bunkering, in addition to power generation, the spokesman added.
"No official LNG bunker facility or a new gas-fired plant have been announced; however, we are reviewing the possibility of these potential projects in the area," he said.
The other LNG import projects are AGL Energy's 100 PJ/year Victoria-based project, to start up in early 2020; Australia Industrial Energy's 100PJ/year Port Kembla project in New South Wales, to start up also in 2020; Integrated Global Partner's 50 PJ/year South Australian Pelican Point plan, due to begin importing from mid-2020; and ExxonMobil's Victoria-based terminal, which is slated to see first gas in 2022.
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