Australia-headquartered integrated energy company Venice Energy is engaged in formal negotiations to secure what it describes as a major international balance sheet partner for a proposed liquefied natural gas (LNG) import terminal project in South Australia, which is said to be the world’s first floating LNG (FLNG) import terminal which will run on 100% renewable energy.
These negotiations for the $300 million Outer Harbor LNG project in Port Adelaide, South Australia, which follow an eight-month market-sounding process, come on the heels of offers from two players Venice Energy identified as international companies with extensive experience in energy-based infrastructure projects.
While explaining the framework to enable negotiations to begin, including a project term sheet, a draft joint development agreement, and documented progress with LNG off-take customers, was in play, Kym Winter-Dewhirst , Venice Energy Chair, noted: “The ultimate success of this project will be achieved with the backing of a partner with both the skills, track record and most importantly, the financial strength, to underwrite the delivery of the terminal.”
Following Crown Sponsorship by the South Australian government in 2020, environmental approval for the Australian LNG project was granted in December 2021 with the project being designated as critical state infrastructure. After more than six years of planning and development, the Outer Harbor LNG project became shovel-ready , with all regulatory approvals in place. Venice Energy clinched an exclusivity agreement with Origin Energy in October 2023.
Winter-Dewhirst highlighted: “At the start of this year we indicated that a final investment decision (FID) could be achieved in the second half of 2024, which in turn would allow the next phase of the project to commence sometime in October/November. Maintaining this schedule is very important because it will ensure we can complete the project construction by the end of 2026 and then begin the commissioning process to enable first gas to be delivered to customers ahead of winter 2027.
“By doing this we can avoid any gas shortages in the system for both South Australia and Victoria which will provide the energy security we all need as domestic supplies continue to decline over the next decade.”
The firm cinched a new commercial understanding with AG&P LNG, a subsidiary of AG&P Group, a few months ago to secure a converted floating storage and regasification unit (FSRU) for the LNG project at Port Adelaide. The Outer Harbor LNG project will consist of an infrastructure-based tolling terminal, two new berths, a 146 000 m 3 FSRU capable of injecting 386 Tj per day throughput, and a gas pipeline connection into the state’s gas network.
According to Venice Energy, its LNG import terminal, located in the Outer Harbor in Port Adelaide, has received all primary government approvals, completed first stage enabling works and when operational, is expected to be one of the first terminals in the world to use 100% renewable energy for its operations.
“Our aim has always been to avoid the likelihood of blackouts in southeastern Australia and use this project as an interim measure that supports the transition away from coal and enables the expansion of renewables into the energy network,” underscored Winter-Dewhirst.