Squadron Energy has announced that its Port Kembla gas terminal will not begin operations until at least 2027, despite warnings from the Australian Energy Market Operator (AEMO) of potential gas shortfalls across southern Australia from 2028. The terminal, which is built and connected to the Eastern Gas Pipeline, will remain in care and maintenance mode until mid-2027.
The delay follows a reassessment of customer needs and updated projections from AEMO. Squadron Energy executive general manager Stuart Davis said the revised timeline reflects market conditions and that the company is in deep commercial discussions with large customers to secure offtake agreements. He expressed confidence that from 2027 onward, the facility's capacity will be sold.
AEMO's 2025 Gas Statement of Opportunities identified peak-day shortfall risks in southern states from 2028, though the report still warns of deepening supply gaps from 2029. The Port Kembla terminal was listed as a future supply option capable of delivering up to 500 terajoules per day but was not included in formal modelling as it was considered a proposed project.
The federal government stated it was made aware of the delay in March and has secured gas supply until 2029. A spokesperson for Energy Minister Chris Bowen said the government has acted to ensure affordable supply for Australian homes and businesses.
Independent Senator David Pocock has criticized the policy settings, arguing that Australia does not have a gas supply shortage but a gas export problem, noting that about 80% of Australia's gas is exported as LNG. Mr Davis countered that the Port Kembla terminal, once operational, could help rebalance supply by facilitating flows of Australian LNG to the east coast.
