Oz AIE Inks FSRU Time Charter with Hoegh LNG

Australian Industrial Energy (AIE) has signed a charter contract with Norway’s Hoegh LNG for its floating storage and regasification unit (FSRU)-based Port Kembla LNG import terminal project on the coast of New South Wales (NSW).

Under the agreement, AIE has the right to lease a 170,000 m³ FSRU, which will be permanently moored at Berth 101 in Port Kembla’s inner harbour, AIE said August 20. The regasified LNG will be then supplied to the existing east coast gas transmission network, some 10 km away. The project is expected to start delivering gas to AIE's customers in Q1 2020.

The FSRU will form part of the final port infrastructure design plans which will also address the NSW government’s planning assessment and development approval requirements, which were provided to AIE mid-August under the government’s Critical State Significant Infrastructure planning process. Final receipt of such approvals will a key step towards AIE being in a position to make a final investment decision, AIE said. In June, the project was declared as critical infrastructure by NSW government.

“Securing the FSRU charter and confirmation of the NSW government’s planning requirements are two further important milestones for our project. We remain on schedule to deliver gas to our industrial customers during early 2020. Our schedule coincides with the expected significant tightening of the east coast gas supply market, especially for major industrial users,” CEO James Baulderstone said.  

“AIE’s NSW gas import facilities will be nothing short of world’s best-in-class. We have Hoegh LNG’s global leadership in the supply and operation of FSRU technology combined with the world’s largest LNG buyer, Jera, which also has decades of LNG import terminal operating experience,” Baulderstone said.

Despite being one of the world’s biggest LNG exporters, Australia, faces a tight gas supply situation in the eastern markets. The situation has led to three separate import project plans.

“We are impressed with the AIE consortium’s capabilities and its vision to address the gas supply challenges that the Australian east coast market is facing, particularly NSW. Hoegh LNG is delighted to be selected as the provider of a modern and efficient FSRU to the AIE consortium, and by that playing a part in delivering competitive, reliable energy to NSW businesses and homes,” Hoegh LNG CEO Sveinung Stohle said.

The Port Kembla terminal project will initially have capacity to supply over three quarters of NSW's gas needs, AIE said.