Origin in box seat to import LNG through South Australia

afr.com:

Origin Energy is in exclusive negotiations to import liquefied natural gas through a proposed $300 million-plus terminal in South Australia for at least 10 years, a deal that – if completed – would be a big boost for the Venice Energy project in Port Adelaide.

A deal, which would mean Origin becoming the sole user of the terminal, is targeted to be sealed “over the coming weeks”, Venice said in a statement.

It underwrites the commercial viability of the terminal to be built in the Outer Harbour, ensuring that the initial construction work will begin “shortly”, Venice Energy chairman Kym Winter-Dewhirst said.

Venice Energy’s LNG import terminal is planned for the outer harbour of Adelaide. 

“Having a binding term sheet agreed is pretty powerful, and that’s given us confidence through our own resources to look at mobilising resources at the site next month,” Mr Winter-Dewhirst said.

Origin, the subject of an $18.7 billion takeover offer from two North American suitors, noted a binding deal has yet to be signed, and said importing LNG through the project was one option being considered.

“Origin is assessing a range of different supply options to help meet the gas supply needs of customers in future years, and this includes continuing to work with Venice Energy on a potential agreement to toll gas through its proposed Outer Harbour LNG import facility,” an Origin spokeswoman said.

The Outer Harbour project is expected to allow up to 110 petajoules of gas to be imported each year, helping ease winter shortages forecast to hit the southern states starting this decade. Privately owned Venice has been working with Japan’s Marubeni on the venture, and is in discussions with other potential equity partners, including companies