EnergyAustralia has reached a preliminary agreement to buy gas from a liquefied natural gas import terminal planned by Australian Industrial Energy, the companies said.
EnergyAustralia, Australia's third-largest energy retailer, is the first customer to sign up to buy gas from the Port Kembla LNG import terminal backed by Japan's JERA and Marubeni Corp and mining magnate Andrew "Twiggy" Forrest's Squadron Energy.
The Australian Industrial Energy joint venture is looking to lock in customers for gas before making a final investment decision on the $250 million project.
The plan is to park a ship, or floating storage and regasification unit (FSRU), at Port Kembla, about 100 km south of Sydney, which could import about 2 million tonnes a year of LNG.
That would be able to supply about 100 petajoules annually to New South Wales, which relies on neighbouring states for most of its gas.
Australian Industrial Energy (AIE) has agreed to supply 15 petajoules a year of gas to EnergyAustralia over five years starting from January 2021 at an oil-linked price, the companies said on Wednesday.
"It's an agreement that provides their business with certainty in the face of increasingly challenging domestic gas market supply," Squadron Energy Chief Executive Officer Stuart Johnston said in a statement on behalf of the AIE joint venture partners.
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