Australian utility, Squadron Energy, has confirmed that its Port Kembla (NSW) gas terminal will not begin operations until at least 2027.
This delay comes despite warnings from the national energy market operator of looming gas shortfalls across southern Australia from 2028, local media said.
However, the Australian Government has claimed that it had secured gas supplies until 2029.
The Port Kembla Energy Terminal - which has been completed and connected to the Eastern Gas Pipeline - will stay in ‘care and maintenance’ ‘until mid-2027, after a reassessment of customer needs and updated projections from the Australian Energy Market Operator (AEMO).
Squadron Energy Executive General Manager of Operations, Stuart Davis, said the revised timeline reflected market conditions.
He revealed that Squadron Energy had received a request from Egyptian state-owned company EGAS for an extension, as it was going through a sales process for the terminal.
Last year, the developer chartered the FSRU ‘Hoegh Galleon’, which will be able to receive both domestic and imported gas.
In March, AEMO's 2025 Gas Statement of Opportunities identified peak-day shortfall risks in southern states from 2028, a shift from previous forecasts predicting earlier shortfalls.
However, the report still warned of deepening supply gaps from 2029 onwards, and called for structural investment in new supply, pipelines, or storage to avoid market imbalances.
Jemena, which owns and operates the Eastern Gas Pipeline linking Victoria and New South Wales, said the delay would not impact its work to reconfigure the pipeline for bi-directional flows, allowing gas to move south to Melbourne.
"We are in deep commercial discussions with a lot of very large customers to take the offtake and we're confident from 2027 on we will be able to sell the capacity of the facility.
"We are the only solution that has gone through financial investment decision (FID), we've finished construction and commissioning,“ Davis said.
Analysis from the Australia Institute showed about 80% of Australia's gas is exported as LNG.
