Re: Höegh Esperanza Versus Höegh Giant?

AGL Employee

Hi RotasQuare,

 

The Esperanza already has closed loop capabilities inbuilt whereas the Giant was going to require modification in order to implement the closed loop system. However, we would have ensured either ship had the capacity to run closed loop and open loop regasification.

 

We are not entirely sure if closed loop provides the best overall outcome for the environment and our aim is to have the best overall environmental outcome for the project. So far, our preference is to limit our carbon footprint and operate in open loop provided there is no significant impact to the marine environment. As part of the EES we will have to understand what this may look like in both scenarios.

 

The latest AEMO 2019 Gas Statement of Opportunities (GSOO), released on 28 March 2019, said the east coast gas market faces tight supply from 2021 and shortfalls from winter 2024 if more is not done to replace rapidly declining output from Bass Strait and supplies from Queensland limited by pipeline capacity.:

‘‘Southern Australia’s overall supply demand balance for 2021-2023 remains very finely balanced, reflecting the ever-tightening integration of Australia’s electricity and gas markets in the context of an evolving and dynamic energy system,’’ said AEMO’s chief system design and engineering officer Alex Wonhas told the ‘Australian Financial Review’ when the report was published on March 28, 2019.

 

The report said:

“Supply from existing and committed gas developments is forecast to provide adequate supply to meet gas demands until 2023. However, risks remain that any weather-driven variances in consumption or electricity market activity that could increase gas demand, creating potential peak-day shortages as outlined in AEMO’s 2019 Victorian Gas Planning Report.”

 

AGL is not a gas exporter, we buy gas from local producers and sell it to our customers.

 

While Australia is a major exporter of natural gas; however, most of this gas is not available to the south-eastern states. It has been a difficult realisation for many that the abundant gas and cheap supplies Victoria once enjoyed are in decline.

 

Declining production from Bass Strait’s big legacy fields has meant Victoria needs to seriously consider and prepare for alternative sources of supply. Even if the supply of gas from unconventional fields in Queensland was available to the pipeline connecting them with Victoria, Victoria would not be able to supply enough during peak winter gas demand due to the limited capacity of the pipeline. Gas supplies from the North West Shelf are not available to Victoria because there is no pipeline across the Nullarbor.

 

The AEMO 2019 GSOO also stated that;

“Without any upgrade to the existing pipeline infrastructure: An import terminal in Victoria, either Melbourne or Gippsland, has the biggest projected impact to reduce projected shortfalls. In addition to providing an additional unconstrained source of gas for Victoria, this terminal is projected to reduce pipeline and storage infrastructure congestion, enabling greater access to supply from northern fields.”

 

“Continued interest in LNG import terminals, particularly in Victoria, New South Wales, and South Australia, would be expected to help relieve pressure on meeting southern gas demand during peak periods and assist in reducing pipeline constraints, but may do little to ease gas pricing pressures.”

 

The tightening outlook for gas supply early next decade has required AGL to seek alternate sources of gas supply to meet the needs of our 1.4 million gas customers.

 

AGL has yet to make a final decision to fully fund the proposed project. We will follow all assessment requirements deemed necessary by the government and regulatory bodies and are willing to be held to these standards.