A consortium including Japan's JERA Co and Marubeni Corp aiming to ship liquefied natural gas (LNG) to Australia's east coast has chosen a site south of Sydney at Port Kembla for an import terminal.
The project will allow access to a new gas supply for local industries in NSW by 2020, the consortium, Australian Industrial Energy (AIE), said in a statement.
AIE also includes iron ore magnate Andrew Forrest's Squadron Energy. Top global LNG buyer JERA is a joint venture of Tokyo Electric Power Co and Chubu Electric Power Co.
This is Australia's second proposed LNG import terminal. The nation, despite being the No.2 LNG exporter, is grappling with a domestic supply gap, partly due to restrictions on exploration and production, and partly to producers selling gas to Japan, China and South Korea in long-term contracts.
Shipping LNG within Australia or importing from elsewhere is viable at the moment because LNG is cheap, but prices are expected to rise in the early 2020s.
The Port Kembla terminal would have the capacity to supply more than 100 petajoules per year, sufficient to meet more than 70 per cent of NSW's total gas requirements.
Building the terminal is likely to require a capital investment between $A200 million and $A300 million, AIE said.
Australia's biggest power generator, AGL Energy, is also considering building an LNG import terminal off of Victoria that could take up to 2.5 million tonnes a year, but that would be mostly for its own needs, to supply its gas-fired power stations and households.
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