Oz Port Kembla LNG Inks Port Lease

Australian Industrial Energy (AIE) has signed a long-term lease agreement with NSW Ports for the site of the Port Kembla LNG import terminal, it said on November 13. The lease agreement includes a 10-year initial term with options to extend up to a maximum 25-year term.

AIE, which was acquired by Australia's Squadron Energy last month, said it will immediately start a site handover process, paving the way for construction works to begin. Construction of the terminal is set to take 18-20 months, putting the project on track to supply more than 75% of NSW’s gas needs by the end of 2022, the company said.

Squadron CEO, Stuart Johnston, said the agreement with NSW Ports further clears the way for agreements between AIE and future gas supply customers to be completed in the coming months.

“We have long recognised Port Kembla as the best site for this critical gas project and with the lease for the terminal now agreed, commercial arrangements around future supply contracts can be accelerated with confidence,” Johnston said.

Earlier this year, AIE secured approval from the state of NSW to expand the terminal's capacity. The A$250mn ($176mn) Port Kembla terminal was declared a critical project by the state in 2018, fast-tracking its approval process. The venture began securing customers and awarding construction contracts last year. 

AIE is also pursuing the development of a dual fuel, LNG-hydrogen 800-MW power station in the Illawarra. It will initially be fuelled with gas from the terminal.