Business

Billionaire miner and Japanese utilities plan Australia LNG import plant

Bloomberg

Billionaire miner Andrew Forrest and two of Japan’s biggest power utilities plan to build a liquefied natural gas import terminal in Australia by 2020.

The terminal could process as many as 2 million tons of LNG a year in New South Wales, the country’s most populous state, to help ease an energy crisis that’s crimped supplies for industrial users, the Australian Industrial Energy consortium said Monday in a statement.

Forrest, the chairman of the world’s No. 4 iron ore exporter Fortescue Metals Group Ltd., is backing the initiative through his Squadron Energy unit along with Marubeni Corp. and Jera Co., a venture between Tokyo Electric Power Company Holdings Inc. and Chubu Electric Power Co. The plan follows a proposal by AGL Energy Ltd. to build an import terminal in Victoria.

Australia is poised to join other large LNG exporters such as Indonesia and Malaysia in building import facilities amid a domestic shortfall that’s seen energy prices surge.

“This project could provide much needed support to Australian manufacturers within two years — that’s much sooner than other proposed solutions,” Squadron Energy CEO Stuart Johnston said in the statement. The facility “would be capable of bringing the world’s cheapest gas to the east coast market, whether that be from Australia’s existing Western Australian gas resources, or other global markets.”

The three locations in New South Wales being considered for the import plant are Port Botany, Port Kembla and Newcastle with a plan to enter a design phase in early 2018, according to the statement. The consortium could also supply gas to a large-scale gas-fired power station in the state. AGL’s proposal in the southern state of Victoria could start operations by 2020-21.

Australia’s LNG exports will rise to 63 million tons a year by mid-2018, according to consultancy EnergyQuest, with the second train of Chevron Corp.’s Wheatstone project and Inpex Corp.’s Ichthys plants both due to start up in the next few months.