Squadron Energy’s plans to build a gas-fired power station at Port Kembla have quietly been withdrawn despite the company insisting it remains committed to building a similar facility in the region.
Key points:
- Squadron Energy has withdrawn its application for a gas-fired power station at Port Kembla
- The project was given State Significant Infrastructure in 2020 but progress had stalled
- Squadron Energy says it remains committed to a gas firming project in the Illawarra
The company, which is owned by Andrew “Twiggy” Forrest, is in the process of building a terminal to import liquefied natural gas (LNG) on the east coast of Australia through the Wollongong port of Port Kembla.
The LNG will be transported in large floating storage regasification units and is set to supply a 635-megawatt power station at the port.
The project’s scoping report claimed the $1.3 billion dual-fuel power station would have the capability to run on a blend of 50 per cent natural gas and 50 per cent green hydrogen “should a local source of green hydrogen develop in the coming years”.
The scale of the project led to it being granted State Significant Infrastructure status by the NSW government
But the NSW government has confirmed the project was withdrawn from the planning pathway in August.
A Squadron Energy spokesperson said the company was “continuing with a gas firming project in the Illawarra”.
The plant was forecast to create up to 700 jobs during construction and 25 to 35 ongoing jobs.
South Coast Labor Council secretary Arthur Rorris said it was a blow to the region.
“It is always disappointing to have plans on the table and then withdrawn,” he said.
“It was a gas project and there were several aspects of it which were, lets just say speculative.”
Project stalled
Progress on the project had stalled since plans for the dual-fuel power station were unveiled three years ago.
Squadron Energy has revealed a similar power station in Dubbo is set to become the company’s first firming power plant when it comes online in 2026.
“All our firming projects are being built for their short-term needs before being transitioned to support green hydrogen transportation and production,” a Squadron spokesperson said.
The Port Kembla Energy Terminal was one of 12 electricity generation projects at the heart of the previous government’s gas-led recovery.
It was awarded $30 million in the 2021-22 budget as part of the Underwriting New Generation Investments program.
Terminal struggles to attract customers
Once completed, the terminal is forecast to have the capacity to supply more than 70 per cent of the state’s gas needs.
Squadron Energy has yet to announce any contractual agreements with energy providers.
However it was removed from the Australian Energy Market Operator’s (AEMO) list of projected projects in March due to insufficient contracted capacity.
The ABC understands large gentailers have been unwilling to sign up to the project before 2026.
In March, Squadron Energy chief executive Jason Whilloughby said he saw “significant and growing customer demand to contract gas through the Port Kembla Energy Terminal from 2026 onwards”.
According to the company the terminal is on track to reach “mechanical completion” at the end of 2024.
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