Australian Industrial Energy (AIE), a subsidiary of Western Australian entrepreneur Andrew Forrest’s Squadron Energy, signed a long-term charterparty agreement with global infrastructure and transport group Höegh LNG to supply a floating storage and regasification unit (FSRU) for AIE’s proposed LNG import terminal at Port Kembla south of Sydney in New South Wales.
Under the agreement the vessel, Höegh Galleon, will be berthed at the terminal where construction of berth facilities has begun and is expected to be operational by mid-2023.
The vessel, built in 2019 by Samsung Heavy Industries in South Korea, has a regasification capacity of 750 MMcfd. It is currently on an interim charter with Cheniere Energy in Corpus Christi, Tex.
The $250 million (Aus.) Port Kembla terminal project will receive LNG imports and connect the regassified supply to the existing 800 km Eastern Gas pipeline that runs from Longford in eastern Victoria to Sydney in New South Wales via a new 12-km pipeline from the port.
In addition to the charter agreement, AIE and Höegh agreed to collaborate on the future design and development of a new generation FSRU capable of receiving clean fuels which can be used as part of future green energy supply chains.
Initial feasibility studies on the new FSRU have begun. The vessel is expected to have capability to deliver both natural gas and green hydrogen or its derivatives, a design that AIE plans will unlock further opportunities for the terminal to support a future hydrogen industry in Australia.
AIE is now looking to New South Wales and Victorian natural gas retailers to help resolve the predicted Australian east coast energy security shortfall with offtake contracts for the terminal’s regassified LNG supply.