EPIK, a South Korea-based FSRU project development company, has entered into a project development option agreement with Port of Newcastle, Australia to start preliminary works on a proposed LNG FSRU import terminal.
The project, named Newcastle LNG, will be sited within the Port of Newcastle, located to serve the New South Wales gas market where natural gas prices remain higher than Asian LNG prices, EPIK said in its statement on Tuesday.
Jee Yoon , EPIK’s founder and managing director, said, “Based on our assessment of the New South Wales gas market, particularly along coastal demand regions such as Newcastle and Sydney, we are confident that by importing LNG via a new, low-cost FSRU terminal, we will be able to provide an infrastructure solution that is capable of delivering a cost-efficient source of alternative gas supplies to the region on a long-term basis.”
Situated at the back-end of the existing gas transmission network, Port of Newcastle is one of Australia’s largest ports and a major trade and logistics hub, together making it an optimal area to develop an LNG import terminal.
Yoon added that the company intends to expand its relationship with the Port of Newcastle by discussing other potential projects, such as a gas-fired power plant and an LNG bunkering facility.
The potential investment for the Newcastle LNG project is estimated to be between $400 million and $430 million, which will include a 170,000-cbm FSRU newbuild and associated on-shore infrastructure.
EPIK expects to place an order for the FSRU newbuild with a shipyard subject to receiving regulatory approvals for the project.