Australian Industrial Energy Pty Ltd (AIE) has signed a Memorandum of Understanding (MOU) with leading energy infrastructure company Jemena to connect the $250 million Port Kembla Gas Terminal (PKGT) with the Eastern Gas Pipeline (EGP), with the project on track to supply more than 75 percent of New South Wales’ gas needs by the end of 2022.

As part of the MOU, Jemena intends to construct a 12km underground pipeline capable of safely and efficiently transferring gas from the PKGT directly into the EGP – the major natural gas arterial between Victoria and NSW.

Also part of the MOU with AIE, Jemena plans to invest over $70 million to build the connecting pipeline and modify the EGP so that it can deliver over 200TJ of gas from NSW into the Victorian market, while being able to supply up to 450TJ of gas per day to NSW – a 25 percent increase on its current capacity.

Project works are expected to create more than 180 jobs throughout the development and construction phases. This is in addition to $76 million worth of subcontracts expected to flow into the local Illawarra community from the PKGT’s construction which will also create around 130 to 150 jobs and between 40 to 50 ongoing jobs during operation, as well as contributing to the diversification and growth of Port Kembla and the Illawarra region.

The MOU with Jemena comes only days after AIE, part of the Squadron Energy Group, announced it had signed an agreement for lease for up to 25 years with NSW Ports, securing the tenure to allow it to commence construction of the PKGT.

Squadron Energy CEO Stuart Johnston said under the MOU, Jemena will provide capacity to deliver 522TJ of gas per day and this moves the PKGT one step 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.”

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1st December 2020