AGL Energy signs deals for proposed LNG import terminal in Victoria

Australian utility firm AGL Energy has entered two agreements for the proposed liquefied natural gas (LNG) import terminal at Crib Point in the state of Victoria.

The company has reached an agreement with the Port of Hastings Development Authority for the use of Crib Point Jetty Berth 2.

Under the terms of the deal, the Port of Hastings will provide jetty remediation works in preparation for AGL’s occupation of the berth for the mooring of a floating storage and regasification unit (FSRU).

The second deal was signed with APA Group to develop and build the Crib Point Pakenham pipeline and the transport of gas from the proposed jetty to the domestic market, subject to obtaining the pipeline licence.

Both agreements are conditional upon the AGL board taking a final investment decision on the LNG import terminal, which is expected during the 2019 financial year.

The company is targeting the first gas delivery to the domestic market for the 2021 financial year.

AGL Energy managing director and CEO Andy Vesey said: “The Crib Point LNG import jetty project has significant potential to provide AGL with the ability to deliver a new flexible source of gas supply to the southern states of Australia.

“This will deliver liquidity, increasing competition to put downward pressure on wholesale prices and provide much-needed capacity and long-term security of supply.

“This project would provide AGL with a new source of competitively priced and secure gas supply and reduce our exposure to the declining, concentrated traditional gas supply sources in Victoria and to volatile Queensland gas markets.”

In March, the Australian Energy Market Operator (AEMO) projected that in the absence of additional gas supply, the Victorian market will experience a potential shortfall from 2022.

According to AGL, the project is aimed at addressing the challenge posed by the shortfall.