Jemena has signed a Project Development Agreement with Australian Industrial Energy (AIE) to connect the Eastern Gas Pipeline (EGP) with Australia’s first LNG import terminal.
The agreement comes after both parties signed an MOU to work together in 2020, and is a crucial – and binding – next step in plugging forecast gas shortages in Victoria which are anticipated from 2023-2024.
Jemena’s Managing Director, Frank Tudor, said the agreement formalises arrangements between the parties and that Jemena will now invest in a capital spend program to progress development of a 12km gas pipeline to connect the EGP to the LNG import terminal.
“The ACCC recently identified a potential for a gas shortfall of around 30 petajoules from as early as 2024 unless an LNG regassification terminal or speculative resources are developed,” Mr Tudor said.
“This project is the most advanced, and best way, of helping to meet this shortfall and will bring additional gas to Victoria and NSW before this deadline at globally competitive prices.
“At the same time, we’re working through options to make gas available to support proposed gas-fired-generation in the Hunter Valley.
“Our early modelling suggests we would be able to deliver enough additional gas into the Hunter Valley to generate approximately 1500MW of electricity.”
“The project, which was given ‘fast-track’ status by the New South Wales Government in 2020, will also see Jemena make the 797km Eastern Gas Pipeline bi-directional so it can deliver over 390TJ of gas per day into the Victorian market, and up to 485TJ/per day to New South Wales.
“This is sufficient capacity to ensure that the needs of the southern market are met, in response to predicted shortfalls.”
Mr Tudor said the announcement is also a win for people and businesses from the Illawarra community who stand to benefit from jobs and other opportunities as the project progresses.
“We expect between Jemena and AIE the project will create over 180 jobs throughout its development and construction phases, which will be in addition to subcontracts awarded to local businesses in the region.”
Under the terms of the agreement, Jemena will build and operate a 12km underground pipeline connecting the Port Kembla gas terminal to the Eastern Gas Pipeline – the major natural gas arterial between New South Wales and Victoria.
First gas is expected to flow in early 2023.