AIE and Jemena sign gas pipeline deal

Gas pipeline image

The MoU will see AIE’s $250 million Port Kembla Gas Terminal (PKGT) connected to the Eastern Gas Pipeline (EGP), with Jemena intending to invest $70 million for the project works, including constructing the 12 km underground pipeline for the safe transfer of gas from the LNG import terminal directly into the EGP.

Jemena will also modify the EGP so it can deliver more than 200 TJ of gas from New South Wales to Victoria, while being able to supply 450 TJ of gas per day to NSW – 25 per cent more than its current capacity.

AIE – part of the Squadron Energy Group – also recently announced it had signed a gas terminal lease with NSW Ports that allowed for construction of the PKGT to commence. 

Squadron Energy CEO Stuart Johnston said under the new MoU, Jemena will provide capacity to deliver 522 TJ of gas per day, which this moves the PKGT closer to delivering critical gas supply certainty for NSW.

“We believe we have secured the best site in Australia for this project and now with an agreement for long term tenure for the site and a pipeline agreement secured, the PKGT remains the only project in the eastern states capable of assisting the NSW State Government to overcome predicted gas shortages by 2024,” said Mr Johnston.

Jemena Managing Director Frank Tudor said the MoU with AIE underlined Jemena’s commitment to delivering affordable gas to both NSW and Victoria.

“This is a crucial next step in delivering on our plans to connect the EGP to AIE’s gas terminal at Port Kembla,” said Mr Tudor.

“This project is a win for the local community, and a win for businesses who use gas in their operations.

“It is not only the quickest and most efficient way of bringing additional gas to market ahead of forecast shortages, but it will also help to place downward pressure on gas prices and stimulate much needed economic activity across regional NSW.

“The project also provides additional impetus for us to progress our plans to modify the EGP to make it bi-directional.

“These plans will allow us to flexibly transport gas between densely populated regions such as Sydney and Melbourne, based on demand and the dynamics of the gas market.”

For more information visit the AIE website.

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