Monday 28th May, 2018

Twiggy plans to import gas to NSW

Fortescue Chief Executive Officer Andrew Forrest aboard the first train loaded with iron ore. Photo: FMG
Andrew Forrest . Photo: FMG

Mining billionaire Andrew Forrest has hatched a plan to import liquid natural gas into New South Wales, and has already made some powerful allies in his quest.

According to Bloomberg this week, Forrest and two of Japan’s largest power utilities plan to build an LNG receival site in NSW by 2020.

The terminal would be built to import up to 2 million tonnes of LNG per annum.

Forrest, who helped develop Fortescue Metals Group into the world’s fourth-largest iron ore producer, is reportedly looking to disrupt the east coast’s gas and energy market, which faces high domestic prices driven by a major supply-demand imbalance.

The development of a trio of major gas export sites in Queensland over the last half-decade has placed increased demand on east coast gas production, and this demand has not been matched with fresh supply.

The result is substantial increase in the price of energy for households and businesses, contributed to by a domestic gas price which is often higher than the international spot price at which much of the exported gas is sold.

‘Twiggy’ Forrest’s new plan would look to inject supply into a hungry domestic market.

Forrest’s Squadron Energy business is being attached to the reports, and he is said to be developing the project with Tokyo Electric Power, and Chubu Electric Power, two Japanese firms.

A 2 million tonne per annum LNG import plant would be able to provide 100 petajoules annually – 75% of NSW’s current gas demand.

“This project could provide much needed support to Australian manufacturers within two years, that’s much sooner than other proposed solutions,” Squadron Energy boss Stuart Johnston was quoted by Bloomberg.

The facility, he said, “would be capable of bringing the world’s cheapest gas to the east coast market, whether that be from Australia’s existing Western Australian gas resources, or other global markets.”

The plan is reportedly considering a site at Port Botany, Port Kembla (near Wollongong), or at Newcastle.