This story was originally published in The West Australian on 27 February 2018 with the headline "Forrest plans NSW gas ships." © Peter Milne.
Andrew Forrest is considering joining the world’s biggest LNG buyer to ship gas to NSW to alleviate the east coast gas shortage caused by soaring LNG exports from Queensland.
Forrest-owned Squadron Energy, Japanese trading house Marubeni and LNG buying giant JERA are targeting gas-hungry industries in NSW hit by soaring wholesale gas prices.
The trio at this stage have agreed to conduct a feasibility study. Squadron Energy chief executive Stuart Johnston said they were targeting gas flowing to NSW in 2020.
A vessel, known as a floating storage and regasification unit, would be anchored off an as yet to be chosen NSW port to receive the liquified gas and send it to the onshore pipeline network.
Mr Johnston said an FSRU was a proven relatively low-cost technology with readily available vessels that required limited additional infrastructure at the location.
AGL’s more advanced proposal to use an FSRU to import LNG into Victoria is also targeting a 2020 start.
Mr Johnston said the two proposals targeted different markets, with AGL having a big retail presence in Victoria.
He said they were considering a broad range of prices, $8-$12 a gigajoule, while details of the project were progressed.
A third option for getting gas to the east coast is the west-to-east pipeline being advanced by the Federal Government, with a pre-feasibility study due to be delivered next month.
Mr Johnston said the pipeline was technically sound, but it would take time to get commitments from buyers to take the big volume of long-term gas flows needed to justify the expense.
If either FSRU project imported LNG from WA, it would form a virtual east-west pipeline.
JERA is the overseas energy arm of Japanese utilities TEPCO and Chubu,
It said in a statement that during the feasibility the consortium would look at sourcing LNG from projects in which JERA had equity. In Australia, JERA has interests in the Gorgon, Wheatstone, Ichthys and Darwin projects.
Mr Johnston said FSRUs were suitable even for short-term market needs as they could be moved elsewhere if demand diminished.
He said gas would be important in Australia for several decades as a transition fuel towards a renewable-energy future.