Australia’s Venice Energy has selected the preferred supplier of the floating storage and regasification unit for its Outer Harbor liquefied natural gas import project down under although the operator is keeping mum on its choice.
The A$200 million (US$155 million) Outer Harbor project is located in Port Adelaide. Foundation gas customers will source their own LNG and the floating terminal will operate as a take-or-pay tolling facility.
The FSRU is hailed as a crucial component of the proposed LNG import facility at Outer Harbor, which will improve and diversify local gas supplies, especially during peak periods. It will also help underpin South Australia’s renewables sector by providing “firm, dispatchable energy” as the state progresses towards further decarbonisation of its energy landscape, said Venice.
The company last December launched the FSRU tender and received bids from six FSRU/LNG shipping companies. The detailed offers were shortlisted in early March, leaving Venice with two players “with highly competitive offers” after the final assessment.
Certainty of supply
“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,” said Venice managing director Kym Winter-Dewhirst.
“We have signed the Heads of Agreement and term sheet with a leading global independent LNG shipowner and operator from Europe and we are beginning negotiations on the fully formed time charter party agreement, which is expected to be concluded in the coming weeks,” he said.
Such European players include Norway’s Hoegh LNG and BW plus Exmar of Belgium.
The floater will have capacity of around 150,000 cubic metres.
“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,” added Winter-Dewhirst.
FID later this year
Once the necessary approvals are in place, Venice expects to take the final investment decision on Outer Harbor “towards the back half of” 2021 and breaking ground soon after.
“With the recent announcement by both the federal and state governments of a A$1 billion energy fund for South Australia and the Prime Minister’s call for an additional 50 to 80 petajoules per annum of gas into the state, Venice Energy is well placed to meet these targets,” he said.
Venice earlier said it envisages commissioning its FSRU-based LNG import project in the third quarter of 2022.