Squadron Energy Pty Ltd., Perth, bought out its two Japanese partners in the proposed Port Kembla LNG import terminal project in New South Wales for an undisclosed price.
Squadron bought 19.9% interest in project owner Australian Industrial Energy Pty Ltd. (AIE) from JERA (a combine of Tokyo Electric Power and Chubu Electric Power) and went on to acquire the 30.1% held in AIE from Japanese trading house Marubeni Corp.
The buy leaves Squadron with 100% interest in AIE to carry the full load and risk in funding the $250 million (Aus.) Port Kembla venture.
Squadron is owned by Western Australian mining magnate Andrew Forrest.
AIE has so far only attracted one customer (EnergyAustralia) to commit to the long-term gas purchase contracts needed to underpin the investment, but the company wants to fast-track development (OGJ Online, June 3, 2019).
It is understood that the Japanese partners were proceeding cautiously and wanted more time to make a final investment decision. Squadron chairman, Michael Masterman, said that the two Japanese entities remain open to future targeted opportunities, including the supply of LNG and the development of an associated gas-fired power station.
Squadron said it is committed to the timely development of the terminal at Port Kembla. The aim is to provide capacity to meet 70% of New South Wales’ gas demand by late 2022 with a supply of 100 petajoules/year.
The proposal involves LNG brought in by seaborne carriers from external sources transferred to a permanently moored floating storage and regasification unit in the harbor, the construction of associated wharf facilities, and a short pipeline connection to the existing Australian east coast pipeline grid.
Squadron’s buyout follows the announcement by gas infrastructure company Jemena about plans to extend from Sydney to northern New South Wales its Eastern Gas Trunkline that transports gas from Bass Strait in Victoria (OGJ Online, Oct. 5, 2020).
Other LNG import terminals have been proposed for locations around Australia’s southeast coast, including AGL Energy Ltd.’s Crib Point project on Westernport Bay south of Melbourne and Viva Energy’s reconfiguration of the Geelong refinery on Corio Bay west of Melbourne (OGJ Online, July 2, 2020; June 16, 2020). All are aimed at providing gas to mitigate the potential shortage of gas in the southeast forecast for as early as mid-2023.