Venice Energy reveals takeover approaches for South Australia LNG import terminal
Venice Energy, which is looking to develop an LNG import terminal in South Australia, has been approached by a number of companies interested in purchasing the project.
Venice Energy, which is looking to develop an LNG import terminal in South Australia to capitalise on a looming east coast gas shortfall, has been approached by a number of companies interested in purchasing the project, the developers have said.
The revelation came after The Australian exclusively revealed that Origin Energy, which last year signed an early stage exclusive agreement to potentially underwrite the development, would not exercise its option.
Without Origin, there has been some concern about the viability of the project, but Venice Energy chair Kym Winter-Dewhirst said there was interest from companies wishing to acquire the development.
“Venice has been approached by a number of companies to discuss the purchase of the project,” said Mr Winter-Dewhirst.
“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 prevent us from naming these companies, I can say they come from a number of different sectors, including existing energy operators, industrial gas consumers, international LNG-specific companies and some private equity players.”
Venice has appointed CLSA to run a process for interested companies, Mr Winter-Dewhirst said.
Australia’s energy industry will be buoyed by the renewed prospects of Venice Energy amid heightened concerns about the country’s gas outlook.
Australia is expected to face a material shortfall in supplies across the country’s eastern seaboard from 2028 as traditional sources run dry.
ExxonMobil – one of Australia’s largest producers of domestic gas – last year said its Gippsland Basin joint venture, which supplies more than 70 per cent of southeast Australia’s domestic gas demand, was rapidly dwindling. ExxonMobil said the number of producing wells had shrunk from 122 in 2010 to 68, and would drop to 36 by the winter of 2024.
The structural deficit leaves the eastern seaboard facing an uncertain future.
New developments have been curtailed in NSW and Victoria, while new pipelines would be needed to unlock potential supplies in the Northern Territory, and this could be prohibitively expensive and would require significant local support.
Gas is a critical fuel source for Australia’s manufacturing sector which is unable to readily switch to renewable energy, and it is expected to play a vital role in the country’s energy transition.
Gas is used as a so-called peaker fuel.
Gas electricity generators are typically fired up in short intervals, supplying power during periods of high demand or when there is insufficient renewable generation due to adverse weather.
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