PERTH (miningweekly.com) – The Port of Newcastle has been tipped as the location for a proposed $430-million gas import terminal to be developed by South Korea’s EPIK.

EPIK this week entered into a project development option agreement with the Port of Newcastle to start preliminary works on the proposed liquefied natural gas (LNG) floating storage and regasification unit (FSRU) project.

The project, named “Newcastle LNG,” will be sited within the Port of Newcastle, optimally located to serve the New South Wales gas market where natural gas prices remain higher than Asian LNG prices. 

“Based on our assessment of the New South Wales gas market, particularly along coastal demand regions such as Newcastle and Sydney, we are confident that by importing LNG via a new, low cost FSRU terminal, we will be able to provide an infrastructure solution that is capable of delivering a cost-efficient source of alternative gas supplies to the region on a long-term basis,” said EPIK’s founder and MD Jee Yoon.

The Newcastle LNG project is estimated to cost between $400-million and $430-million, and will include a 170 000 m³ class new-build FSRU and associated on-shore infrastructure.

EPIK expects to place an order for the FSRU new-build with a shipyard subject to receiving regulatory approvals for the project.

“We are very excited to be working with Port of Newcastle and hope to expand our relationship by discussing other potential projects, such as a gas-fired power plant and an LNG bunkering facility,” Yoon said.

Port of Newcastle’s executive manager for customer and strategic development, Ian Doherty, said the deepwater port was uniquely placed on Australia’s east coast due to its significant land and channel capacity, making it an attractive location for the Newcastle LNG project.

“This type of development opportunity is consistent with our diversification plans and we’re pleased to be supporting EPIK as it conducts preliminary investigation work, especially given its potential benefits for the New South Wales economy,” Doherty said.