Port Kembla power station declared critical

SQUADRON Energy’s Port Kembla Power Station has been declared Critical State Significant Infrastructure by the New South Wales government, some two years after the proposed LNG import terminal adjacent received the same declaration.

 Still no word on if project is a-go

Still no word on if project is a-go

Andrew Forrest's Squadron plans to build a 600MW combined cycle dual-fuel power station to run off gas, and later hydrogen, in tandem with Squadron subsidiary AIE's proposed LNG terminal — which will supply gas to the power station. 

AIE was originally a consortium made up of Squadron and Japan's Jera and Marubeni. 

The idea was to source Jera's portfolio gas to send to the station given the company is the world's single largest gas buyer. The two companies pulled out last year, leaving Squadron as sole member. 

The terminal will be connected to the Eastern Gas Pipeline via a 12km pipeline, after AIE signed an agreement with Jemena in March; however, neither power station nor the terminal have reached a final investment decision, and there have been persistent problems around the company securing gas contracts. 

Squadron boss Stuart Johnston told the AFR earlier this month he was adamant that the import terminal would go ahead, saying he was hoping the project would be "up and running" by 2023. 

Earlier this week The Australian reported Johnston quit, replaced by Dr Michael Shaw on an interim basis. 

The granting of State Significant status is designed to speed up the approval process for certain projects deemed crucial by the planning minister, Rob Stokes. 

"If approved, the Port Kembla power station will be a critical part of the NSW energy mix as we move to cleaner, greener renewables by firming up supply and keeping energy prices low," Stokes said on Friday.   

The state government said Squadron can now request assessment requirements to prepare an Environmental Impact Statement, which it noted will be subject to extensive community consultation and full environmental assessment.

Forrest has faced criticisms of hypocrisy over the two projects, after declaring that his separate Fortescue Metals Group will become carbon neutral by 2030 while also lashing companies like Santos and Woodside over their future gas projects.

However Forrest and the NSW government have been quick to promote the project's green credentials, with state energy minister Matt Kean noting the project will use up to 30% green hydrogen in its energy mix. 

"If approved, the dual hydrogen-gas design of this project will create early demand for the green hydrogen needed to decarbonise the state's heavy industries and set them up to succeed in a low carbon global economy," he said.

Squadron Energy's parent company, Tattarang, told Energy News the project will run off 50% hydrogen on day one of operation and 100% hydrogen by 2030. 

"Our ambtions for this project are significant and we see the initial power station supporting the development of an emerging green energy precinct at Port Kembla, one that underpins future investment to develop industrial uses and applications of hydrogen or ammonia demand or renewable energy," Tattarang chief investment officer John Hartman said.

"We believe this project can be a catalyst for future development of green hydrogen projects in the Illawarra region." 

Earlier this year the Australian Energy Market Operator flagged the adjacent import terminal project as being crucial to maintain steady gas supply on the east coast, so long as first cargo is delivered by the winter of 2023. EnergyQuest recently suggested not one but two LNG import terminals would be needed on the east coast to meet supply requirements. 

The NSW government said the power station could be operational by 2024. 

Johnston's departure marks the fourth unexpected CEO departure from Australia's energy company ranks in as many months. 

*Updated to include comment from Tattarang*

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.


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