This is the second proposed LNG import terminal for Australia, the world's number 2 LNG exporter, looking to fill a supply gap at a time when the country's gas producers have locked in long-term contracts to supply LNG to Japan, China and South Korea.
A final investment decision is expected this year on the project to import up to around 2 million tonnes a year of LNG starting in 2020 into a market where energy prices are soaring, said a spokesman for Australian Industrial Energy.
"This market is desperate for new gas," James Baulderstone, a former Santos executive who is leading Australian Industrial Energy, told Reuters.
This comes after reports last year that Australia was experiencing a shortfall of affordable gas on its east coast amid rising LNG exports and declining production.
Australia is one of the world's largest gas exporters but the government's liquefied natural gas (LNG) ambitions and slowing output are hitting the eastern region's supplies and driving up prices.
The LNG receiving terminal would be able to meet up to three-quarters of the gas needs of Australia's most populous state, New South Wales.
The proposed new LNG import terminal would be located at one of three ports that are being considered.
Australian Industrial Energy's investors are mining billionaire Andrew Forrest's Squadron Energy, Marubeni and JERA, the world's biggest LNG buyer, which is a joint venture of Tokyo Electric Power and Chubu Electric Power.
General Electric is providing technical support and design services for development and construction of a gas-fired power plant.
A JERA spokesman declined to comment.
— CNBC contributed to this report.