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Wednesday 24

October, 2018 4:09 PM



AGL strikes deals for LNG import jetty

AGL strikes deals for LNG import jetty

AGL Energy has secured key agreements in relation to its proposed liquefied natural gas import jetty at Crib Point in Victoria.

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By AAP 12.06.2018 10:31 AM

AGL Energy has struck several deals for its proposed liquefied natural gas import jetty at Crib Point in Victoria, which could help deliver more gas to Victoria and South Australia.

The energy company has signed development and gas transportation agreements with APA Group and works, lease and berthing and jetty agreements with the Port of Hastings Development Authority.

Chief executive Andy Vesey says the Crib Point LNG Import Jetty project has "significant potential" to enable the company 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," Mr Vesey said in a statement on Tuesday.

Without additional gas supply, Victoria could face a shortfall in peak daily winter demand in 2021 and a general shortfall from 2022, according to the Australian Energy Market Operator's Victorian Gas Planning report, released in March.

"Our proposed project is uniquely placed to address this challenge," Mr Vesey said.

Mr Vesey said the project would provide AGL with a new source of "competitively priced and secure gas supply" and cut its exposure to declining, concentrated traditional gas supply sources in Victoria and to volatile Queensland gas markets.

"This project would enable us to deliver gas to our existing customer base securely and affordably, and create a source of revenue growth by increasing supply to commercial and industrial customers."

AGL announced the selection of Crib Point, on Victoria's Western Port, as its preferred site for a $250 million gas import jetty and pipeline, subject to government approval, in August 2017.

The company on Tuesday said it was still working through processes with key commercial and stakeholders before making a final investment decision on the Crib Point LNG Import Jetty in the 2018/19 financial year.

If the project goes ahead, first gas delivery into the domestic market should start in 2020/21.

AGL operates gas and coal-fired power plants, renewable energy projects and gas storage plants, and sells gas and electricity to more than 3.6 million customers.

In a separate statement, APA Group said its capital expenditure for the project's pipeline was estimated to be in the range of $160 to $200 million.

Under the project, APA will build about 60 kilometres of new pipeline with a capacity of at least 550 terajoules of gas a day.

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