Venice Energy has secured a commercial agreement with AG&P LNG that guarantees the Outer Harbor project will receive the converted floating storage regasification unit (FSRU).
The deal guarantees the Adelaide project will receive the converted FSRU at “an improved cost and in a timely manner”.
Stage 1 enabling works have been completed and it is ‘shovel ready’.
John Nicholson, Venice Regas CEO, said the works includes a significant dewatering of large-scale dredge ponds, which was a particular challenge during December following record rainfall in excess of 100mm.
A major programme of geotechnical drilling was also undertaken, to a depth of more than 40m. Drilling was undertaken adjacent to the proposed wharf construction area and will allow finalisation of the wharf design.
“This work has produced very positive results that will significantly reduce the project’s capital costs as we work to fully optimise both the delivery schedule and budget,” he said, adding its project team has locked in a range of key permits and plans.
In mid-2022 Venice signed an FSRU supply agreement (Time Charter Party agreement) with Greek shipping company GasLog.
Last year, GasLog underwent a major restructure and in doing so made the decision to sell-off a number of vessels to others.
Venice Energy signed an exclusivity agreement with Origin Energy last October to enable negotiations on Origin becoming the single user of the LNG import terminal. That agreement concludes at the end of this month.
“There was an expectation that a final 10-year Terminal User Agreement (TUA) would be settled sometime in December 2023 or January 2024,” according to a statement.
“We are continuing to negotiate in good faith with Origin on potential solutions to ensure that that enough new gas is delivered to avoid critical shortfalls as a result of rapidly declining domestic production.”
In recent months, Venice has been approached by a number of companies to discuss the purchase of the project.
Venice has appointed international M&A specialists CLSA to run a process for interested companies.
To date, 15 companies have expressed their interest in the project and eight have so far registered as part of the due diligence process following the opening of a data room.
Although the requirements of Non-Disclosure Agreements (NDAs) prevent naming companies, they come from a number of different sectors, including existing energy operators, industrial gas consumers, international LNG-specific companies and some private equity players.
Nebula Energy bought a majority stake in AG&P LNG at the end of January and is investing $300m in the company to fast-track LNG terminal development across emerging markets in South and Southeast Asia.
AG&P LNG owns and operates the Philippines LNG (PHLNG) Import Terminal, is developing the Karaikal LNG Terminal & Downstream in India, and completed three FRSU conversions, taking advantage of access to their own shipyards via their parent company in South Korea.