EPIK, a South Korea-based liquefied natural gas (LNG) floating storage and regasification unit (FSRU) project development company has entered into a Project Development Option Agreement with Port of Newcastle to commence preliminary works on a proposed LNG FSRU import terminal.
The project, Newcastle LNG, will be sited within the Port of Newcastle, optimally located to serve the New South Wales gas market where natural gas prices remain higher than Asian LNG prices.
EPIK’s founder and managing director Jee Yoon said, “Based on our assessment of the New South Wales gas market, particularly along coastal demand regions such as Newcastle and Sydney, we are confident that by importing LNG via a new, low-cost FSRU terminal, we will be able to provide an infrastructure solution that is capable of delivering a cost-efficient source of alternative gas supplies to the region on a long-term basis.”
Related article: INPEX ships first LNG cargo
Situated at the back-end of the existing gas transmission network, Port of Newcastle is one of Australia’s largest ports and a major trade and logistics hub, together making it an optimal area to develop an LNG import terminal.
Port of Newcastle’s executive manager Customer & Strategic Development, Ian Doherty, said the deepwater port was uniquely placed on Australia’s east coast due to its significant land and channel capacity, making it an attractive location for the Newcastle LNG project.
Related article: Long-term LNG asset agreement announced
“This type of development opportunity is consistent with our diversification plans and we’re pleased to be supporting EPIK as it conducts preliminary investigation work, especially given its potential benefits for the NSW economy,” Mr Doherty said.
The potential investment for the Newcastle LNG project is estimated to be between US$400M and US$430M, which will include a 170,000m3 class new-build FSRU and associated on-shore infrastructure. EPIK expects to place an order for the FSRU new-build with a shipyard subject to receiving regulatory approvals for the project.