Site lease to accelerate Oz LNG terminal

Australian Industrial Energy (AIE) has signed a lease agreement for up to 25 years with NSW Ports for the site of the Port Kembla Gas Terminal (PKGT) at Berth 101 in Port Kembla’s inner harbour.

AIE will immediately start a site handover process, paving the way for construction works to commence. Construction of the PKGT is forecast to take only 18-20 months, putting the project on track to supply more than 75% of NSW’s gas needs by the end of 2022

“We have long recognised Port Kembla as the best site for this critical gas project and with the lease for the terminal now agreed, commercial arrangements around future supply contracts can be accelerated with confidence,” said Stuart Johnston, CEO of Squadron Energy, which owns and operates AIE.

AIE is also pursuing the associated development of a dual fuel – LNG – Hydrogen 800MW power station in the Illawarra, to be initially fuelled by gas from the PKGT. The design provides for large scale dispatchable power and the ability to transition to hydrogen fuel as Fortescue Metals Group and other hydrogen suppliers bring industry scale production online.

AIE was originally formed in 2018 as a consortium comprised of Squadron Energy and Japanese companies Marubeni Corporation and JERA Co.,Inc. In October 2020, Squadron Energy became the 100% owner and operator of AIE, having acquired the Marubeni and JERA stakes in the project.