00:00This new gas import terminal at Port Kembla is nearly finished.
00:06It's sitting alongside a coal export facility and just across the harbour from Blue Scope
00:11Steelmaker.
00:13And it doesn't look like a whole lot from the surface because most of the pipes are
00:16in fact underground, but the centrepiece is in fact a huge ship, a storage and regasification
00:23plant which, if all goes to plan, in 2026 will be sailing through the Port Kembla heads
00:29and then it'll be basically moored up against this new import terminal.
00:33And what this plant can do is receive shipments of liquefied natural gas and it's looking
00:40likely that those shipments will come from overseas and the plant will regasify the gas
00:46and then pump it into the east coast grid.
00:49Now it's being built by Squadron Energy which is owned by billionaire Andrew Forrest.
00:54Now he's known to be quite a clean energy evangelist, so you might take from that, you
01:01know, the fact that he's heavily investing in gas sort of shows the role that the fossil
01:05fuel will be playing in the renewable energy transition.
01:09But as I said, the company is hoping to have this ready and importing gas into the east
01:14coast network in time for 2026 and that's because at the moment we're facing forecasts
01:21of a gas shortfall and in fact in winter, just gone, we came very, very close to suffering
01:29a shortfall.
01:30Here's what Squadron Energy CEO Rob Wills said about the need for this new import terminal.
01:37The short answer is very, very close and the gas storage facilities that are available
01:43currently were drawn down significantly and that supply crisis led to high gas prices
01:48which flowed into our energy electricity market as well with high electricity prices
01:52that could all have been averted had this energy import terminal facility been available
01:57at that time.
01:58And the Australian energy market operator isn't painting a particularly rosy picture
02:03either.
02:04AMO reckons that within just a few short years the forecasts are for demand to outstrip supply
02:10and it's saying that that is a structural shortage we're facing in a couple of years'
02:15time but even in the years leading up, when it gets to peak periods like winter, we are
02:19facing potential shortfalls.
02:20So that is the gap that this Squadron import terminal is seeking to plug.
02:27We've spoken to some energy analysts and they agree that while it does seem kind of crazy
02:33that Australia as a massive exporter is about to be importing gas from overseas, they believe
02:38that it is the only solution currently on the table to actually meeting the shortfall
02:45in demand.
02:46Here's energy analyst Rick Wilkinson.
02:49Quite simply, we've run out of time.
02:51This is the only option, LNG reclassification, that will bring on significant volumes in
02:57the next two years.
02:59All the other options, be they expansion of pipelines, increased storage or explore for
03:04and develop, take three to four years or even longer before you've reached certainty.
03:10And I should note, Ros, that the reason we're facing this gas shortfall is because the kind
03:15of bedrock of supplies in the southeastern part of Australia, the Bass Strait, are running
03:19out faster than expected and new fields simply haven't been developed.
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