Hoegh ponders Australia for LNG deliveries

Norwegian LNG transport and floating LNG terminal operator Hoegh LNG AS—in what was considered by many as a surprise development—is reported as adding Australia to its list of potential destinations.

Norwegian LNG transport and floating LNG terminal operator Hoegh LNG AS—in what was considered by many as a surprise development—is reported as adding Australia to its list of potential destinations.

The company has begun to make approaches to Australian energy retailers with the idea of establishing floating regasification and storage vessels at points around Australia’s east coast despite the fact that Australia is set to move into top spot as a global LNG exporter.

The move is seen as a response to the looming domestic gas shortage in the eastern states caused by Australia’s gas producers having tailored their gas plants to the export market and entering a number of long-term contracts with overseas LNG customers, particularly in Asia.

Hoegh believes there are potential customers on Australia’s east coast where floating regasification and storage units could provide access to the world market.

The idea of importing LNG to Australia is not new. The country’s second-largest energy retailer, AGL Energy, said last year it was already considering the establishment of a regasification terminal in South Australia, Victoria, or New South Wales by 2021.

However, according to Hoegh, a floating facility could be put in place within 6 months of signing a contract provided there is port space and infrastructure such as a jetty and pipeline hook-up facilities.

A floating facility also could be used as a relatively cheap temporary measure, while a fixed onshore facility may turn out in the long run to be an expensive white elephant.

Analysts in Australia are divided on imported LNG proposals. Some say it will be more economical to divert gas from the country’s LNG projects in response to short-term supply needs. Others say that this gas may not be available in time as much of the gas resource still needs to be developed. They point out that there are countries that are gas importers and exporters, including the US where imports are funneled into the northeast states during times of high demand.

More in Home