Australian Industrial Energy (AIE) has reached a preliminary agreement with EnergyAustralia to supply 15PJs of natural gas per annum from its Port Kembla gas terminal (PKGT). Beginning on 1 January 2021, the five-year contract will provide gas for EnergyAustralia as well as for electricity.
This announcement comes after the Australia’s decision in April 2019 to award development consent to AIE’s Port Kembla gas terminal (PKGT), creating a pathway for the terminal to be built by midlate 2020.
The $250 million PKGT project, could supply over 70% of the state’s gas needs. Having received the necessary planning consent, AIE’s PKGT project is considered one of the most advanced LNG import terminal projects on the Australian east coast.
Ross Edwards, EnergyAustralia Executive – Markets, stated:
Natural gas remains a big part of Australia’s supply mix and it has an important role to play in a modern, cleaner energy system, alongside renewables and technologies like batteries and pumped hydro. But new supplies are desperately needed
Speaking on behalf of the AIE Joint Venture Partners, Squadron CEO Stuart Johnston, mentioned that they have negotiated a market competitive, oil linked price with EnergyAustralia. This agreement can provide certainty ahead of an increasingly challenging domestic gas market supply.
The agreement with EnergyAustralia will provide a significant underwrite against the annual capacity of AIE’s PKGT. It is a key step to make the PKGT happen within the next 18 months.
The AIE joint venture partners expect to make a final investment decision to continue with the terminal in the next few months.