Port Kembla FSRU

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Port Kembla FSRU, also known as Port Kembla Energy Terminal or PKET, is an FSRU terminal under construction in Port Kembla, New South Wales, Australia.

Location

The terminal is under construction in Port Kembla, a suburb of Wollongong in New South Wales.

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Project details

• Owner: Australian Industrial Energy
• Parent: Squadron Energy (100%)
• Vessel Owner: Höegh LNG
• Vessel Name: Höegh Galleon
• Location: Port Kembla, New South Wales, Australia
• Coordinates: -34.4814133, 150.8893602 (approximate)
• Capacity: 304 TJ/d (approx. 2.33 mtpa)
• Cost: A$250 million (US$159 million)
• Financing: JERA, Marubeni Corp. and Squadron Energy
• Status: Construction
• Type: Import
• Start year: 2026
  • Previously: 2023

Background

In June 2018 the project was proposed as a 100 petajoules/yr terminal for importing natural gas from southeast Asia. The project would cost an estimated A$300 million and is backed by Australian billionaire Andrew Forrest and Japanese energy company JERA. The Port Kembla terminal would connect to the existing Eastern Gas Pipeline via the 12 kilometre Port Kembla to EGP Gas Pipeline.

In March 2019 AIE announced that an Environmental Impact Statement (EIS) had been submitted and reviewed and that front-end engineering and design (FEED) had been completed. In April 2019 the project was approved by the New South Wales government. In May 2019 EnergyAustralia agreed to buy 15 petajoules of gas a year from the facility over 5 years starting from January 2021.

In November 2019 the project was reported to be significantly delayed and unlikely to reach its projected in-service date of late 2020.

In March 2020 Victoria lifted its ban on onshore gas production but a spokesman for AIE said this would not impact plans to build the FSRU for importing gas. In April 2020 Victoria approved an application from AIE to modify the terminal's development consent which will allow for increased output and number of shipments of up to 46 variable-sized vessels per year, representing an increase in the number of shipments by 20 per year. AIE has yet to reach a final investment decision (FID) but has stated that it is aiming to achieve this by the third quarter of 2020. In October 2020, Marubeni and Jera sold their interests in the Port Kembla LNG import terminal to Australian energy firm Squadron Energy.

The Sydney Morning Herald reported in January 2021 that the project developers were aiming for gas imports to start flowing at the facility by 2022, with FID potentially to be reached in the first quarter of 2021. In March 2021, it was announced that Australian energy infrastructure company Jemena had signed a deal with Australian Industrial Energy (AIE) to connect the LNG import terminal to the Eastern Gas Pipeline via the 12 kilometer Port Kembla to EGP Gas Pipeline which Jemena will build and operate.

In August 2021, the Australian Financial Review reported that the project was four months into major construction and expected to become operational in 2023.

The developers of the terminal are also considering its application for hydrogen in the future. The pipeline connecting the terminal with the East Coast Gas network could become the first green hydrogen enabled pipeline under construction in Australia, according to Squadron's CEO.

In June 2022, Hoegh LNG and AIE confirmed a long-term FSRU charter deal for Port Kembla import terminal.

In September 2023, the terminal's construction had reportedly reached 70% completion.

In November 2023, it was reported that Squadron Energy had withdrawn plans to build a gas power plant at Port Kembla. ABC also reported that Squadron had not yet signed any contractual agreements with Australian energy providers and that buyers were unlikely to sign up to the project before 2026.

In November 2023, the FSRU has started its long-term charter contract with Australian Industrial Energy. Since the terminal was still under construction at the time, the vessel was expected to work as an LNG carrier in the meantime.

As of November 2023, the project's start date has been updated to winter 2025-2026.

In April 2024, construction of the terminal was nearing completion, while Squadron Energy was still in the process of negotiating to secure supply contracts with energy companies.

In May 2024, the FSRU was sublet to EGAS and will be used in Egypt; reportedly, it will be located in Ain Sokhna for a period of 19-20 months, from June 2024 to February 2026. It was also reported that Squadron Energy expects to start using the FSRU at the terminal in 2026.