AGL is planning a project that will source gas at competitive prices from Australian and international suppliers for our gas customers in south-eastern Australia. The gas would be transported on liquified natural gas (LNG) ships from interstate and overseas, transferred to another ship and converted from liquid form back into gas on that ship and then piped into the existing transportation network.
The ship, known as a floating storage and regassification unit (FSRU,) that stores the liquid gas would be moored at the existing jetty at Crib Point. Depending on demand, between 12 to 40 LNG ships per year would moor alongside the FSRU at Crib Point to resupply the FSRU with LNG.
The gas import jetty would be connected by pipeline to an existing gas pipeline in Packenham – the exact length of this pipeline will depend on the route between the jetty and the transmission pipeline but we anticipate that the new pipeline will be approximately 55kms long. The pipeline will be bi-directional allowing gas flow from Pakenham and will be built with valves along the route to facilitate future gas supply to communities. We will also need some plant and equipment for processes such as metering and odorisation to be installed onshore at the jetty.
A feasibility study is currently underway to identify the risks associated with the project. This is being done in conjunction with the formal regulatory planning and assessment requirements.
Like all big industrial and resources projects the gas import jetty will carry some risks. The key is to identify, minimise and manage the risks to the greatest extent possible.
At AGL we believe it’s essential we are upfront about risks, especially with a project’s neighbours. There are economic, commercial and regulatory risks. If the supply or price of gas here or overseas changes to a great degree, the project might become unviable. Likewise, if the regulatory environment (either at a State or Federal level) changes then this may also impact the viability of the project.
Any environmental risks (including impacts to marine ecology, RAMSAR, water birds, seagrass and mangroves, emissions, air, water and noise) are being identified. Once identified, AGL will discuss these risks and impacts with the relevant specialists, consultants and community members to determine if mitigation or elimination strategies and solutions can be developed and implemented.
The FSRU will have specific risks (including environmental and safety risks) which we will need to understand and manage. A fact sheet is available on this webpage which provides further detail on the FSRU.
If the project gains its required regulatory approvals and ‘final investment’ approval is granted by the AGL Energy Board then first deliveries of imported gas could happen early in 2020 in time to meet the peak winter demand. This time frame would require that everything goes smoothly with site preparation, sourcing of the FSRU, securing suitable LNG supplies, procuring and installing the necessary structures, plant and equipment and the construction of the pipeline. It is anticipated the pipeline construction and jetty upgrades would take at least 18 months to complete.
The current outlook suggests that shipping LNG to south-eastern Australia will provide reliable, long term certainty for our customers and the market.
AGL estimates the project will cost up to $250 million. AGL expects this will be substantially more cost effective than alternatives such as building a pipeline to bring gas from Western Australia. There is no government funding being requested for the project.
Got a question or want to have your say? We’re keen to hear from you.