EPIK, a South Korea-based LNG project development company, said that the government of New South Wales (NSW) has declared the Newcastle GasDock LNG import terminal project as Critical State Significant Infrastructure (CSSI).
This is a major milestone for the project, to be located at the Port of Newcastle, EPIK said in its statement.
Newcastle GasDock LNG will provide gas supply to users in the Hunter Valley as well as the broader NSW region.
Jee Yoon , EPIK’s founder and managing director, said “EPIK’s primary objective is to deliver the most competitive infrastructure solution for natural gas imports into NSW. With CSSI status in hand, we are a considerable step closer to delivering the critical infrastructure needed to bring new energy to NSW.”
The Newcastle GasDock terminal will be capable of supplying more than 80 percent of NSW’s current gas demand, with the potential to increase throughput as demand requires.
Existing domestic gas supply and pipeline constraints compound the need for the Newcastle GasDock terminal in NSW, which currently imports approximately 95 percent of its current gas consumption at considerable expense from other States.
CSSI designation is awarded to projects that are deemed to be essential to the State for economic, environmental and social reasons, and sets out a clear pathway to planning approvals, providing greater timeline certainty.
Subject to receiving all regulatory and planning approvals, the project is anticipated to begin operations in the first half of 2021 and represents a potential direct investment of approximately AUD$250 million ($170 million) in NSW in addition to the value of the FSRU to be utilized by the project.
Natural gas remains a crucial baseload provider of electricity in the energy mix; especially as NSW transitions away from coal to a lower-carbon economy. As recently as March 2019, the Australian Energy Market Operator (AEMO) in its Gas Statement of Opportunities reaffirmed its position that without greater diversification, insufficient gas supply would pose a significant challenge to the region.
“We look forward to continuing discussions with major gas and power users throughout the State as they seek long-term, competitive solutions to their gas supply and power needs,” said EPIK executive director, James Markham-Hill .
In July, EPIK said that it had engaged industry-leading energy consulting experts, Wood Mackenzie, to conduct an analysis of the southeast Australian gas market in parallel with EPIK’s commercial efforts seeking terminal capacity subscribers.