Australia's Origin in talks to import LNG from Venice Energy's terminal
(Reuters) - Australian energy infrastructure developer Venice Energy said on Friday that power producer Origin Energy is in talks to import LNG from its Outer Harbor LNG terminal and be the sole user for at least a decade.
The Outer Harbor project, to be built in Port Adelaide, is expected to supply up to 110 petajoules of gas per annum, importing LNG and regasifying it for local and interstate gas networks.
The project's approval should reduce gas shortages in the southeast of Australia from mid-2026 and beyond, Venice Energy said.
Origin, which is the subject of a Brookfield-led consortium's $9.67 billion takeover, did not immediately respond to Reuters' request for comment.
"The reason we have not entered an agreement to date is because there are cheaper sources of domestic gas supply available and these provide the best chance of keeping gas prices lower for our customers," an Origin spokesperson had said in August last year.
Venice Energy Chair Kym Winter-Dewhirst said that subsidiary Venice Regas and Origin will enter into an agreement over the coming weeks for the exclusive use of the fully formed terminal.
"With gas supply shortages foreshadowed, looks like Origin Energy is trying to get ahead of the curve by getting a deal lined up with Venice Energy. Even if that means importing LNG into a country that is historically known as one of the big exporters of the gas," said Tim Waterer, chief market analyst at KCM Trade.
Last year, Australia's parliament passed legislation setting a price cap on natural gas for one year, deterring the development of new supply.
The deal could come as a blow to iron ore baron Andrew Forrest-owned Squadron Energy's Port Kembla facility in New South Wales, which has struggled to line up customers to finalize its project.
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