GasLog is close to securing a contract to supply a floating storage and regasification unit for an LNG import terminal in the Australian port of Adelaide.
The Peter Livanos-backed company has entered into a heads of agreement to negotiate a charterparty for the unit with Australia’s Venice Energy.
GasLog, which has a fleet of 35 LNG carriers, will provide a technical support crew to operate the facility.
Venice Energy managing director Kym Winter-Dewhirst said: “GasLog is a pre-eminent global player in the LNG sector and having their involvement in our project is a significant boost for us. They will bring both physical assets and technical expertise.”
GasLog, which recently completed a merger with BlackRock’s Global Energy & Power Infrastructure Fund, said the signing of the HOA was a “major step forward for…GasLog’s continued interest in the FSRU sector”.
“We believe this project will provide a positive contribution to the South Australian energy market through helping to deliver cleaner energy to underpin the renewable sector,” said GasLog chief executive Paul Wogan.
Highly competitive offers
Venice Energy said government and other approvals for the project are due in the next few months, followed by an anticipated 12-month construction period that will see the first shipment of LNG into the facility by end of 2022 to early 2023.
Venice Energy launched its FSRU tender in December last year, receiving offers of participation from six vessel providers.
Three detailed offers were shortlisted in early March, and later whittled down to two with what were described as “highly competitive offers”.
Terminal construction costs have been put at AUD 200m ($155m), with the project estimated to be costing around AUD 850m in total.
The Venice Energy project is one of five LNG-import terminals under development to help fill an expected shortfall in gas supply in south-east Australia from 2024 as output declines from Australia’s Bass Strait fields.
Australian Industrial Energy, which is backed by Squadron Energy, is planning an FSRU-type terminal project at Port Kembla in New South Wales.
Other projects include those by Australian power company Viva Energy and South Korean private equity firm EPIK, which is working with Hyundai LNG Shipping.
Dutch terminal operator Vopak is looking to build a facility in Port Phillip Bay in the state of Victoria and hopes to submit a proposal to the state government in the third quarter of this year.
However, one project has already bitten the dust, with AGL Energy pulling the plug on its FSRU-based LNG import project in the state of Victoria after local authorities rejected the plan due to environmental concerns.
