Australian billionaire Andrew Forrest has secured a lease for the site on the New South Wales coast where one of his companies plans to build a A$250 million ($181 million) liquefied natural gas (LNG) import terminal.
Australian Industrial Energy (AIE), wholly owned by Forrest's Squadron Energy after it bought out its Japanese partners, said on Friday it had leased the site at Port Kembla for 10 years initially, with an option to extend to 25 years.
Several companies are racing to build LNG terminals to fill a gas supply shortfall expected in southeastern Australia from 2024 as output declines from the Bass Strait fields off the coast of Victoria.
AIE has begun early site preparation and plans to begin construction, which involves building a jetty for a floating storage and regasification unit (FSRU), in the first quarter of 2021. It expects to be ready to receive LNG by late 2022.
"We have an advantage in terms of timing on a lot of the competiton that we weren't taking advantage of. Now we are," Squadron Energy Chief Executive Stuart Johnston told Reuters.
AIE is racing to get its Port Kembla Gas Terminal open ahead of AGL Ltd's <AGL.AX> planned LNG import terminal in the state of Victoria, which is awaiting government approval. A decision is due by the end of this year.
There are three other proposed LNG import terminals on the drawing board, too. However, analysts expect the market will only need one or two of the terminals.
Squadron has yet to line up gas buyers for the project but is in "advanced discussions" with potential buyers. It hopes that by locking in the site and beginning early work, that will give buyers more confidence to sign deals, Johnston said.
($1 = 1.3789 Australian dollars)
(Reporting by Sonali Paul; Editing by David Clarke)
