Australia’s Venice Energy is close to finalising the long-term charter of an floating storage and regasification unit for an LNG import terminal in the port of Adelaide.
The company said it had signed a heads of agreement and term sheet with the unnamed European LNG shipowner for the FSRU.
“We are beginning negotiations on the fully formed time-charter party agreement which is expected to be concluded in the coming weeks,” Venice Energy managing director Kym Winter-Dewhirst said.
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”.
“In the end, it really came down to certainty of supply against our project schedule and a desire on our part to work with a specific company due to their long-term commitment, international expertise and technical capabilities,” Winter-Dewhirst said.
“The FSRU represents the major proportion of our operational expenditure, so having it locked in at this stage of the project is critical to our development and provides us with certainty as we push ahead with our final round of project approvals this year.”
Winter-Dewhirst said that once the company has its approvals, it anticipates reaching a final investment decision towards the back half of the year and breaking ground shortly thereafter.
Venice Energy’s project will involve an FSRU, as well as a 500-MW gas-fired power plant that will be delivered in two 250-MW stages.
The terminal will be operated on a third-party processing model, with off-takers responsible for securing their own LNG.
Potential customers had reportedly suggested that they would prefer to import the LNG themselves, leading the firm to decide that it should focus on building infrastructure.
Terminal construction costs have been put at AUD 200m ($155m), with the project estimated to be costing around AUD 850m in total.
Venice Energy is reported to have secured one customer for the project, with an agreement signed last December. However, it has declined to reveal details about the customer or the import capacity it has signed up for at the terminal.
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 the Bass Strait fields.
Australian Industrial Energy, 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.
