Media article yesterday (extract)
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Andrew Forrest’s LNG import venture in NSW has told government it could fast-track its start-up to avert a forecast gas shortfall in southern markets in winter 2023 and is pushing for the national energy market operator to step in to secure gas supplies through the terminal to make that happen.
Eva Hanly, chief executive of Dr Forrest’s private company Squadron Energy, said work over the past few days showed the feasibility of bringing forward the start-up of the Port Kembla project by about six months from December 2023.
But the cost would increase beyond the budgeted $250 million, and a decision is needed within the next few weeks to ensure the floating terminal is secured in time from supplier Hoegh in Norway.
As large electricity retailers hold off from committing to use the terminal, Ms Hanly has discussed with governments a proposal that an independent body – likely the Australian Energy Market Operator – uses the terminal to secure back-up gas to avert a shortfall across the market.
At Port Kembla, Squadron needs to lock in customers to use the LNG import terminal to avoid losing the Hoegh Galleon floating terminal that it has tentatively agreed to contract from Norway’s Hoegh LNG.
But so far
EnergyAustralia is the only one of the “big three” gas retailers that has agreed to use the facility, which will have the capacity to supply up to 30 per cent of the combined gas needs of NSW and Victoria.
Those may include government support to aggregate demand among buyers that need the gas, bypassing the retailers.
“If [the energy retailers] are saying, ‘our customers don’t need the gas’, then the next question is how do we get the gas for the businesses and users that do need the gas?” she said. “So that’s something we’re exploring now and would like to talk to government about.”
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This reads to me, that Fortescue's Squadron Port Kembla LNG project is not yet viable, because it has not been able to secure customer offtake agreements.
No Offtakes = no funding = not viable.
No Offtakes probably because the cost of supplying gas to East Coast via LNG is simply too expensive.
So now Fortescue is looking for Govt bailouts and support, but disguising it by demanding Govt intervention thru AEMO to force/encourage customers to offtake gas from their terminals.
If the Govts were to provide any support to gas suppliers, why not provide some support to East Coast gas suppliers like COE or Beach, who can supply the East Coast with way, way cheaper gas than freezing gas supplied from WA (or worldwide), shipping it to the other side of Aust, then re-liquifying that gas, and pumping it to customers.
If the Fed Govt wants to get involved, then get Dan Andrews to allow gas exploration in Vic, instead of punishing his Vic public and forcing up gas shortages and prices, because he has not provided a solution to the failure of base load energy supply in Vic.
If Port Kembla LNG project is not viable, well tough luck imho.
Again, it is the public which is expected to bear the brunt of satisfying vested interests.
(20min delay)