Woodside Petroleum has struck a deal with fellow Australian company Viva Energy that could see it supply liquefied natural gas to a proposed regasification terminal on Australia’s east coast.

Woodside revealed Thursday it had signed a memorandum of understanding with Viva that would enable it to supply LNG to the latter’s proposed regasification terminal in Geelong, Victoria.

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The agreement will see the pair discuss the opportunity for Woodside to acquire regasification usage rights at the terminal to regasify LNG.

The agreement could help underpin the proposed gas import project, which will include a floating gas terminal, an extension to the Geelong Refinery pier, a treatment facility and a new pipeline.

“Our MoU with Viva Energy presents an opportunity for Woodside to supply reliable, cost-competitive LNG from our Western Australian projects and global portfolio into the east coast gas market, which is predicted to face a shortfall in coming years,” Woodside chief executive Meg O’Neill said.

“Working to secure regasification capacity at Viva Energy’s proposed import terminal aligns with Woodside’s future production profile and the ongoing needs of east coast Australian customers for reliable, lower-carbon energy sources.”

Viva chief executive Scott Wyatt added that Woodside’s experience and capability in supplying LNG, shipping, terminals and international gas markets would help his company progress towards a final investment decision, which is expected in the third quarter of 2022.

“Woodside’s potential participation in the Gas Terminal Project highlights the value of LNG terminals as ‘virtual pipelines’ to deliver LNG from Australia and other sources into the east coast domestic gas market,” he said.

“This can be achieved more efficiently and with lower environmental impact than building new pipelines to transport gas from other domestic gas sources to the south-east Australian gas market.”

Subject to next year’s anticipated FID being taken, Viva expects first gas will be delivered to the terminal in 2024, with the two-year construction period expected to create more than 150 jobs, while around 50-100 ongoing local jobs are expected to be created once the terminal is fully operational.

Viva’s Geelong terminal is not the only gas import terminal being planned in Australia, which is also currently the world’s largest exporter of LNG.

Australian Industrial Energy (AIE) is progressing its Port Kembla Energy Terminal, also in Australia, which is expected to be operational by mid-2023.

Venice Energy is also proposing an LNG import terminal at Outer Harbor, roughly 14 kilometres from the South Australian capital of Adelaide, which, if approved, could come online as early as late-2022.