Sign of hope for NSW manufacturing as Australia's first LNG import terminal approved
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Industry leaders are celebrating the approval of a $250 million gas import terminal in New South Wales which is tipped to meet the majority of the state’s gas needs and secure thousands of manufacturing jobs.
Key points:
- $250m gas import terminal approved for construction at Port Kembla
- Experts say hub will shore up state’s gas supply and create thousands of jobs
- Deputy Premier says project could affect the need for coal seam gas
The NSW Government announced it had given the green light for the project on Monday, which would involve building a new berth at Port Kembla, south of Sydney, to house a floating liquid natural gas (LNG) handling facility.
A consortium backed by billionaire Andrew Forrest and Japanese energy giants is behind the project, and will be subject to conditions aimed at minimising impacts of dredging in the harbour, as well as regulating air and water discharges during construction.
“We’ve heard from manufacturers about the cost of energy, especially around gas,” NSW Deputy Premier John Barilaro said.
“What this will do is stimulate the economy [and] keep those jobs in Australia … in my mind it means a boost to our manufacturers.”
New hub could be ‘just the beginning’
The gas terminal itself would create 150 construction and 50 ongoing jobs, but the Illawarra Business Chamber said it would secure 15,000 jobs in gas-dependent businesses across the region.
Regional Development Australia Illawarra chief executive, Debra Murphy, said it was a boon for energy-intensive industries right along the east coast of Australia.
“It’ll really assist high energy-intensive manufacturing,” Ms Murphy said.
“Energy costs a lot not only to households, but also to industry — so it’s great to see there can be more certainty for the market.”
Ms Murphy said the LNG import terminal was “just the beginning”, with the potential for a gas-fired power station nearby.
The proposed gas-fired power plant was among 12 projects shortlisted last month for Federal Government underwriting, which was in response to some Nationals MPs’ calls for a new coal-fired plant.
Major gas projects are also being proposed in other states, including AGL’s plans for a floating terminal at Crib Point in Victoria, but have yet to receive planning approval.
Squadron Energy chief executive officer Stuart Johnston said gas-fired power was crucial to “firm up” the supply across NSW.
“[With] the massive increase in renewable energy that we’re seeing across the eastern seaboard, you need something to turn that from intermittent to firm,” Mr Johnston said.
Diversification signals shift away from coal
While being one of NSW’s biggest ports, Port Kembla has had its share of uncertainty in recent years, with the near-closure of the steelworks and China’s recent restrictions on Australian imports.
Wollongong City councillor Dom Figliomeni, who was the boss of Port Kembla Port Corporation for almost a decade, said the port’s diversification would help shield it from volatility in the coal market.
“The thing with diversification is it ensures the longer term viability of the local economy in that it is not a mono-industry [and] doesn’t rely on one particular industry, such as coal,” Cr Figliomeni said.
“It does cement the opportunity for Port Kembla to be one of the most diversified ports across the country.”
CSG ‘more expensive’ than imports, says Deputy Premier
While it is widely considered a gamechanger in the way gas is accessed in the NSW market, it remains unclear whether the importation of gas will negate the need for domestic coal seam gas (CSG) production.
Gas company Santos is awaiting approval for its highly controversial Narrabri Gas Project in the state’s north west, and Mr Barilaro said a final decision would be made on it later this year.
“Coal seam gas is a form of gas, [that] in its extraction … does make gas a little bit more expensive, so there are other arguments — not only the impacts it will have on aquifers,” Mr Barilaro said.
“The reality here today is we want to see gas here in the New South Wales market, be it CSG, be it liquified natural gas that comes through pipelines from the Bass Strait.”
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