MELBOURNE, Aug 14 (Reuters) - Australia’s New South Wales government said on Wednesday it will fast track its review of a liquefied natural gas (LNG) import terminal at the port of Newcastle, proposed by a South Korean firm, as the state urgently looks to beef up gas supply.
The Newcastle LNG project, planned by South Korean firm EPIK, was declared “critical state significant infrastructure”, which means the project will not have to go to the state’s independent planning commission for approval, saving several months in the review process.
New South Wales, Australia’s most populous state, needs to boost gas supply from 2023 for both industry and gas-fired power due to declining supply from fields off southern Australia and the planned closure of a big coal-fired power plant.
“This LNG terminal would significantly address this risk,” the state’s acting premier, John Barilaro, said in a statement.
The $430 million Newcastle LNG project, slated for a final investment decision in 2020, will still face a detailed environmental review before a final decision by the state’s planning minister, the government said.
EPIK is vying with two other projects to bring gas to the state: another LNG import terminal, Port Kembla LNG, which has already received final approval, and the long-delayed Narrabri coal seam gas project, planned by Santos Ltd.
Newcastle LNG, which could import up to 300 petajoules of gas a year, is one of five proposed LNG import terminals vying to start up between 2021 and 2022 in Australia, even as the country overtakes Qatar as the world’s largest LNG exporter.
New South Wales said the import terminal could supply up to 80% of the state’s gas needs.
That could mean the controversial $2 billion Narrabri project, which Santos has long said could supply up to half of the state’s gas needs, might not be needed. Santos has said Narrabri gas would be cheaper than imported LNG.
All the import projects are looking to plug into a market where gas prices are soaring due to rapid growth in LNG exports, rising costs of production and declining output from older gas fields.
EPIK was not immediately available for comment on Wednesday.
Reporting by Sonali Paul; editing by Richard Pullin