LNG Import Plan For South Australia Targets First Gas In Mid-2020
MELBOURNE, July 23 (Reuters) - A private firm is looking to import liquefied natural gas (LNG) to South Australia starting in 2020, around the same time as two other proposed import projects, looking to fill a supply gap as domestic gas gets sucked into LNG exports.
Venice Energy, set up by former BHP Billiton executives, plans to submit a development application to the South Australian government within the next month to park a floating storage and regasification unit (FSRU) in Port Adelaide, Managing Director Kym Winter-Dewhirst said.
If regulatory approvals come through by March, construction could begin by June 2019, he told Reuters in an interview. The project would be funded partly by Venice's owners, management consultancy Integrated Global Partners, with other equity sources which have yet to be lined up.
"And then we could have first gas into the South Australian market by June/July 2020," Winter-Dewhirst said.
The LNG import plan is part of a three-stage project with a budget estimated at A$750 million to A$800 million ($556 million to $593 million). That investment includes building a 500 megawatt gas-fired power plant in two phases.
Japanese trading company Mitsubishi Corp backed feasibility work on the project and Venice is in talks with Mitsubishi for future participation, Winter-Dewhirst said.
"We are studying many possibilities for our future business developments in Australia and it's one of the options," a Mitsubishi spokesman said when asked about the project. He declined to elaborate further.
Venice Energy's plan coincides with projects proposed by AGL Energy and a group called Australian Industrial Energy, backed by top Japanese LNG importer JERA, to import the superchilled fuel to the states of Victoria and New South Wales. Gas prices have soared there as domestic supply has been piped into LNG export plants in Queensland.
At the same time, the dominant gas supplier to those states, ExxonMobil Corp, has also said it was considering importing LNG to Victoria.
All are pushing ahead despite a recent report by Australia's energy market operator saying it no longer expects a gas shortfall in southeastern Australia before 2030.
Australia's government commodities forecaster said in a recent report that imports could help cap soaring gas prices, but the economics might not work as it might be tough to find cheap LNG beyond 2022.
Energy consultants Wood Mackenzie forecast in a report last week that only one LNG import terminal would be needed until the 2030s.
However, Venice Energy's Winter-Dewhirst said given the costs of piping gas across long distances in Australia, his company might be able to work out gas swaps with AGL's LNG project.
"They're complementary in some ways," he said.
Venice Energy's plans were first reported by the Australian Financial Review.
($1 = 1.3484 Australian dollars)
(Reporting by Sonali Paul; Additional reporting by Yuka Obayashi in TOKYO; Editing by Kenneth Maxwell)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.