Some of the Hunter's leading business people, each with skin in the game, have welcomed the Prime Minister's announcement he will build a gas-fired power plant at Kurri Kurri if the private sector does not confirm enough new energy investment by April.
Former Newcastle lord mayor Jeff McCloy and Central Coast developer John Stevens are behind a 2000-hectare redevelopment at Kurri Kurri where Scott Morrison promised on Tuesday to build a gas plant if the market did not come forward with concrete plans for replacing the power generation of AGL's Liddell plant when it closes in 2023.
Another prominent developer, Hilton Grugeon, and business partner Garbis Simonian were "delighted" with the Prime Minister's support for a gas plant as it would be a ready customer for their proposed $1.2 billion underground gas pipeline from Queensland to Newcastle.
The government's proposed intervention in the gas market has bemused the industry and many energy experts, who argue the move brings even less certainty to the sector.
But the Hunter business community has welcomed the potential investment.
A joint venture of the McCloy Group and Stevens Group has a binding commercial agreement to buy the former Kurri Kurri aluminium smelter site next to the Hunter Expressway from Norwegian firm Norsk Hydro.
They plan to convert the land into a housing estate, business park, heavy industrial site and a large biodiversity offset area, though a rezoning proposal to allow the development has been moving at glacial pace through the state's planning system since 2015.
Project manager Shane Boslem said the joint venture had been talking to "a number of businesses within that energy market".
"We've got a number of interested parties doing due-diligence assessment on our site for energy businesses," he said.
"It's around power generation, some renewables in there, solar, energy from waste, and others in there.
"We've got some confidentiality agreements in place with those parties while they do that work."
Mr Morrison's office said the government-owned Snowy Hydro company was "already scoping opportunities to build a new gas fired generation project at Kurri Kurri".
A spokesperson for Energy Minister Angus Taylor said the plant would make up any shortfall in power generation lost when Liddell closed.
The plant, if required, would be modular in design and generate anywhere up to the full 1000MW produced at Liddell.
Mr Boslem said the energy sector's potential investment at Kurri Kurri was "significant".
"You're not talking $100 million or $200 million; you're talking in excess of $500 million in capital investments for these energy businesses.
"The number of construction jobs that would go with that would be significant. It would take a number of years to build these things.
"Certainly, Kurri and Cessnock and even the Hunter needs that at the moment. The jobs that have been lost because of the smelter [closing] need to be replaced."
The smelter site's high-voltage infrastructure was a "unique attribute" for power generators.
Mr Boslem said Mr Morrison's visit had "caught me by surprise", but he was "not surprised that the rhetoric's starting to increase, because who would want to be an industry or a government or a prime minister where you all of a sudden have blackouts".
Mr Grugeon said the 850-kilometre pipeline he and Mr Simonian planned to build from Newcastle to a proposed Australian gas trading hub near Roma, in western Queensland, would be the only viable way of supplying gas to Mr Morrison's plant.
The Hunter Gas Pipeline (HGP) project won a five-year extension on its state government approval last year and is revising the route with input from affected landowners.
"We're ready to go. If somebody else wants to bring the gas down from Queensland and start from scratch, they're probably talking about a five- to seven-year turnaround," Mr Grugeon said.
"If they build the plant, they've got to get the gas from somewhere, and they can't get it from the current infrastructure."
The pipeline is contingent on a customer placing a long-term order, most likely for at least 10 years, for the gas it will carry.
Mr Simonian said HGP had asked the government to underwrite the project so that work could start before contracts were locked in.
"We will then sign customers while we're building. This is quite common. It's been done all over the world," he said.
"What they do, in effect, is get you started to build it. They're not out of pocket, but they de-risk it for investors so you can raise the money and build it."
He said the company had talked to potential Hunter customers, including Snowy Hydro and AGL, which has lodged plans to build a $400 million gas-fired plant at Tomago.
The government also said gas import terminals like one proposed for Newcastle by Korean company EPIK would be "considered in the modelling" of its planned National Gas Infrastructure Plan.
The NSW government last year granted the $589 million floating terminal, which EPIK hopes to build in the Hunter River's South Channel, high-priority planning status.
EPIK said on Tuesday that it would make a final investment decision on the terminal next year and could start operating by the end of 2022.
The Australian Energy Council, which represents most electricity generators and investors, said Mr Morrison's plan risked deterring the very investment he was seeking to encourage.
"There are no material reliability concerns that would warrant this kind of interventionist approach, and there are already mechanisms in place to address any shortfall identified," AEC's chief executive, Sarah McNamara, said.
While you're with us, did you know the Newcastle Herald offers breaking news alerts, daily email newsletters and more? Keep up to date with all the local news - sign up here
IN THE NEWS
- KNIGHTS: Tex Hoy to partner Mitchell Pearce in the halves following the dumping of Mason Lino
- Scott Morrison's national energy address at Tomago on Tuesday: This isn't ideology, it's just common sense
- Climate campaigners react to Prime Minister Scott Morrison's push for gas-fired plant at Kurri Kurri
- Young family scammed into paying $800 as a bond for a rental property that never existed