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Marubeni backs SA LNG instead of Andrew Forrest project
1st July 2022.
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Venice Energy and Marubeni join forces on South Australian LNG import project
1st July 2022.
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The Perfect Synergy – exploring the promising future of LNG in Australia
Kym Winter-Dewhirst, LNG Industry, May 2022.
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Venice Energy LNG import terminal at Port Adelaide gets planning approval
The Advertiser
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Aspiring LNG importer heads for IPO
Financial Review, 6 January 2022
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Rush to import gas as supply crunch looms
The Australian, 30 August 2021
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Venice signs up Austral Construction for early contractor works
Venice Energy Media Release, 30 August 2021
Venice Energy signs up Greek company GasLog to supply major piece of kit for gas import plans
The Australian, 6 July 2021
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Outer Harbor project secures leading international LNG shipping partner
Venice Energy Media Release, 6 July 2021
Tender closes for proposed $200m South Australian LNG import facility
Venice Energy Media Release, 5 May 2021
$200m terminal to be supported by Venice Energy through listing plan
Tank News International, 9 November 2020
Designs on $200m gas-import project
The Advertiser, 5 November 2020
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SA gas importer plans listing to support $200m terminal
Financial Review, 5 November 2020
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Project agreement signed for LNG import facility at Outer Harbor
Venice Energy Media Release, 4 November 2020
Venice Energy eyes 2021 FID for Outer Harbor LNG
Singapore (Argus Media, 28 April 2020)
Private-sector Australian firm Venice Energy expects to take a final investment decision (FID) on its Outer Harbor floating LNG import terminal project in Adelaide, South Australia (SA) by February 2021, with the terminal expected to start up by the end of the year.
A combination of factors including prospective buyers expressing interest in securing their own cargoes and a change in wharf design forced the firm to push back its timeline by a year from its initial target of a late 2019 FID, said Venice Energy managing director Kym Winter-Dewhirst.
The firm is aiming to begin construction on the project in March next year, with commissioning and the import of a first LNG cargo by the end of 2021, he added.
Venice Energy is targeting throughput of around 80PJ (2.14bn m³) of gas in the first year, which it expects could increase to 140-150PJ in subsequent years as off-taker requirements rise. The firm aims to supply gas to SA and western Victoria, both of which face firm heating demand in the winter months from June to August.
The project will involve a floating storage regasification unit, as well as the construction of a 500MW gas-fired power plant that will be delivered in two 250MW stages. Venice Energy intends to secure government approvals for the power plant once it finalises its investment decision on the terminal and expects a start-up of the plant by 2024, at the latest.
The firm intends to operate the terminal based on a third-party processing model, with off-takers responsible for securing their own LNG. Potential customers had suggested they will prefer to import the LNG themselves, leading the firm to decide that it should focus on building infrastructure.
“We realised that to trade gas we would either have to acquire or hire that skill set ourselves, though we remain open to that option in the future,” Winter-Dewhirst said.
The project is estimated to cost A$830m ($538mn) in total, with A$180m for the import terminal and A$650m for the power plant. The firm has secured one customer so far, with an agreement signed in December last year. Winter-Dewhirst declined to reveal details about the customer or the import capacity it has signed up for at the terminal.
Venice Energy faces stiff competition in bringing the Outer Harbor project on line. Another three other LNG import projects. with total planned nameplate import capacity of 10.5mn t/yr, are vying to be developed along Australia’s east coast in the next two years to meet gas demand as domestic production starts to shrink from 2022.
Australian-Japanese consortium Australian Industry Energy (AIE) and South Korea’s Epik plan to make an FID on their projects in New South Wales (NSW) this year. AIE is looking to develop its 2mn t/yr Port Kembla LNG import terminal, while Epik has proposed to build its 4.5mn t/yr Newcastle LNG import terminal. Australia’s AGL Energy last June postponed the timing of the delivery of a first LNG cargo to its Crib Point import terminal in Victoria to the second half of the 2021-22 fiscal year to 30 June, against a previous guidance of deliveries during 2020-21. It had said at the time that the project faces increased complexity over timing and costs but was still a compelling proposition.
Industry participants are uncertain if gas demand on Australia’s east coast will be able to accommodate all four proposed terminals. ExxonMobil deferred a fifth project in December because of insufficient interest from prospective gas buyers in committing to long-term supply contracts.
Demand in Australia’s southern states totalled 486PJ in 2019 and is projected to dip to about 387PJ, or 8.1mn t/yr in 2024, according to the Australian Energy Market Operator’s (AEMO) 2020 Gas Statement of Opportunities report released in March. East Australia could face gas shortages during its 2024 winter because of a 35pc drop in gas output from southern fields, including offshore Victoria and onshore NSW and SA, AEMO said.
A projected decline in east Australian gas output makes importing LNG an attractive proposition, especially now when Asian spot LNG prices are at a discount to domestic Australian gas prices.
An LNG netback indicator for east Australia, the Argus Gladstone fob prompt price — calculated by subtracting freight as well as costs associated with production from the delivered price of LNG to Asia-Pacific markets — fell to an all-time low of A$2.18/GJ ($1.48/mn Btu) on 27 April.
Current east coast domestic gas prices have also softened but are around A$2-2.50/GJ higher than the LNG netback price.
The AWX price, the Argus assessment for month ahead deliveries to Wallumbilla in Queensland was A$4.245/GJ on 24 April. It averaged A$5.429/GJ during January-March, down from A$9.607/GJ a year earlier. The AVX price, the Argus assessment for month ahead deliveries to Victoria, was assessed at A$4.820/GJ for the same day. It averaged A$6.28/GJ over January-March compared with A$9.913/GJ over the same period last year.
Argus Media Singapore Group Pte. Ltd., 50 Raffles Place, #10-01, Singapore Land Tower, Singapore 048623
News archive
- Designs Taking Shape for South Australia’s LNG Import Project
Venice Energy Media Release, 26 February - Venice Energy is floating South Australian Energy Answers
Australian Financial Review, 22 July
Licensed by Copyright Agency. You must not copy this work without permission. - LNG Import Plan for South Australia Targets First Gas in Mid-2020
Reuters, 23 July - LNG Changes Everything for Australia’s East Coast Gas Market
Forbes, 12 July - Re-Charging Australia’s Energy Sector
The Urban Developer, 11 July - Horizon: Australian LNG Imports: Crazy or Not?
Energy Intelligence, 14 June - Eastern Australia Targets Third FSRU
Interfax, 29 May - Gas Giants Swap Roles as Biggest Buy Set as Aussie Saviour
Bloomberg, 15 May - Mitsubishi Backs $800m Gas Solution for South Australia
Australian Financial Review, 13 May
Licensed by Copyright Agency. You must not copy this work without permission. - South Australia Offered a New $600m Energy Answer
Australian Financial Review, 17 March