AGL Reaches Key Milestones for Oz LNG Import Project
Australian energy retailer AGL has progressed its plan to build an LNG import jetty on the country’s east coast with the execution of two agreements which involve the development of a pipeline and the use of a berth at the chosen port, the company said June 12.
It has made an agreement with APA Group for the development and construction of the Crib Point Pakenham Pipeline and the ongoing transportation of gas from the proposed LNG import terminal to the domestic market.
And, with the Port of Hastings Development Authority, it has made a works, lease, and berthing and jetty agreement for the long-term use of Crib Point Jetty Berth 2, it said.
“The Port of Hastings Development Authority will begin jetty remediation works to prepare for AGL’s exclusive occupation of Crib Point Jetty Berth 2 for the continuous mooring of a floating storage and regasification unit (FSRU). The agreement is subject to regulatory approvals and final investment decision by the AGL Board,” it said.
AGL is expecting to make a final investment decision on the project during the 2018-2019 (July-June) financial year for delivery of first gas into the domestic market during the 2020-2021 financial year.
If AGL does not proceed with the project, its total financial exposure as a result of entering these agreements would be up to A$65mn ($49.32mn). This is in addition to its currently committed capital expenditure to the development of about $37mn.
APA said its capital expenditure for the pipeline is estimated in the range of A$160mn to A$200mn. It would be approximately 60 kilometres in length with a capacity of at least 550 TJ (14.69mn m3) per day, it said.
“This project would provide AGL with a new source of competitively priced and secure gas supply and reduce our exposure to the declining, concentrated traditional gas supply sources in Victoria and to volatile Queensland gas market,” AGL CEO Andy Vesey said.
“This project would enable us to deliver gas to our existing customer base securely and affordably and create a source of revenue growth by increasing supply to commercial and industrial customers,” he added.
It’s expected that the LNG project will have a capacity of 100 PJ (2,670mn m3) per year. Crib Point is in the state of Victoria.
Australia, which is the world’s second largest LNG exporter, does not currently have any LNG import terminals. However, the Australian Industrial Energy consortium also has a proposed project – of a similar size and planned for a similar timeframe, which it recently chose Port Kembla in New South Wales as the intended site for the project.