Login
Andrew Forrest secures LNG important terminal site
Herbert Smith Freehills has advised Australian Industrial Energy on its $250 million LNG import terminal.
Tony Zhang
Firm: Herbert Smith Freehills (Australian Industrial Energy).
Deal: Herbert Smith Freehills has advised Australian Industrial Energy (AIE) on the land arrangements for Australia’s first liquefied natural gas (LNG) import terminal at Port Kembla in New South Wales.
Area: Energy and resources.
Key players: The Herbert Smith Freehills team was led by partner Nicholas Cowie, assisted by senior associates Japonica Sheridan and Maxwell Wu and associate Allison Cavanagh.
K&L Gates advised NSW Ports and Ashurst was legal advisers to the adjoining tenant.
Deal significance: AIE has entered into a long-term agreement for lease with NSW Ports to construct and operate a gas terminal and pipeline at Port Kembla with an estimated capital cost of $250 million. The construction phase will see the creation of between 130 and 150 jobs and between 40 and 50 ongoing roles during operation.
The deal also involved a complex tripartite negotiation with the existing tenant to ensure delivery of a vacant, remediated site with separate utility services that will enable both sites to function independently.
AIE is now 100 per cent owned within the Squadron Energy group, which is part of one of Australia’s largest private investment groups, Tattarang, owned by Australian businessman and philanthropist Andrew Forrest and his family.
The project is the first of its kind in Australia and will involve the delivery of LNG to Port Kembla where it will be loaded in liquid form onto a floating storage and regasification unit (FSRU). The LNG will then be stored and, when needed, converted to gas onboard the FSRU and then inputted, via pipeline, to the NSW gas transmission network.
“NSW currently imports more than 95 per cent of the natural gas it uses from other states and AIE is expecting to deliver from this LNG terminal more than 75 per cent of NSW’s annual gas needs by the end of 2022,” Mr Cowie said.
“We are delighted to have helped AIE to achieve such a significant milestone along the critical path for delivery of this ambitious project, and the Herbert Smith Freehills team looks forward to assisting AIE to build the terminal, lock in its customer supply contracts and achieve first gas in late 2022.”
