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Australian state fast tracks review of second LNG import terminal

Australia’s New South Wales government said on Wednesday it will fast track its review of a liquefied natural gas (LNG) import terminal at the port of Newcastle, proposed by a South Korean firm, as the state urgently looks to beef up gas supply.

The $430 million Newcastle GasDock LNG project, planned by South Korean firm EPIK, was declared “critical state significant infrastructure”, which means the project will not have to go to the state’s independent planning commission for approval, saving several months in the review process.

New South Wales, Australia’s most populous state, needs to boost gas supply from 2023 for both industry and gas-fired power due to declining supply from fields off southern Australia and the planned closure of a big coal-fired power plant.

“This LNG terminal would significantly address this risk,” the state’s acting premier, John Barilaro, said in a statement.

The Newcastle GasDock project will still face a detailed environmental review before a final decision by the state’s planning minister, the government said.

“As it stands today, we are aiming to have all regulatory and planning approvals obtained within the first quarter of 2020, which would enable the project to begin importing LNG in the first half of 2021,” EPIK Executive Director James Markham-Hill said by email.

EPIK is vying with two other projects to bring gas to the state: another LNG import terminal, Port Kembla LNG, which has already received final approval, and the long-delayed Narrabri coal seam gas project, planned by Santos Ltd.

Newcastle GasDock, which could import up to 300 petajoules of gas a year, or about 6 million tonnes of LNG, is one of five proposed LNG import terminals vying to start up between 2021 and 2022 in Australia, even as the country overtakes Qatar as the world’s largest LNG exporter.

New South Wales said the terminal could supply up to 80% of the state’s gas needs.


That could mean the controversial $2 billion Narrabri project, which Santos has long said could supply up to half of the state’s gas needs, might not be needed. Santos has said Narrabri gas would be cheaper than imported LNG.

All the import projects want to plug into a market where gas prices are soaring due to rapid growth in LNG exports, rising costs of production and declining output from older gas fields.

Markham-Hill said EPIK is talking to “multiple” firms interested in using its terminal for storage and regasification, but declined to say which companies. (Reporting by Sonali Paul; editing by Richard Pullin and Himani Sarkar)

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Editorial Comment: The Future of FLNG: Less is More?
-Adrienne Blume
Global LNG export capacity is expected to increase by 45% between 2017 and 2022, to more than 400 metric MMtpy, with 90% of the new capacity coming from sanctioned projects in the U.S. and Australia. By 2050, this capacity is anticipated to exceed 700 MMtpy. Regasification capacity is anticipated to increase even more sharply.
Executive Viewpoint: Back to production: Where we’re going, we don’t need pipelines
-Mark Casaday
What if a cost-effective way existed to extract and distribute natural gas, regardless of proximity to pipeline, and bring those assets back to production? What if the industry went in a direction that did not need pipelines? For those looking to monetize unproductive natural gas assets or bring unproductive wells back to production, it would be revolutionary.
Regional Focus:Australia to boost LNG exports despite domestic gas shortage
-Eugene Gerden
Australia is planning further increases in LNG production and exports over the next decade, despite quickly depleting reserves and a looming supply shortage in the domestic market.

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