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The Guardian
4 days ago
- Business
- The Guardian
Victoria says it is getting out of gas – so why has it approved a new LNG import terminal?
Victoria has approved a plan to bring in gas by sea from other states and even overseas, giving the go-ahead to a gas import terminal near Geelong. Viva Energy's import terminal, which would enable up to 160 petajoules (PJ) of liquefied natural gas (LNG) to be shipped to Victoria each year – about 88% of the state's gas consumption – still requires approval under federal environmental laws. The state's planning minister, Sonya Kilkenny, said her decision to approve the project was 'striking the right balance between development and environmental responsibility' and would not undermine Victoria's target of net zero emissions by 2045. But the Victorian Greens leader, Ellen Sandell, condemned the decision, calling the project 'polluting [and] unnecessary'. So, why is a state that's transitioning to renewable energy, and getting off fossil gas, planning to import more? Viva Energy's proposed LNG import terminal is located in Corio Bay, 7km from Geelong and about 75km south-west of Melbourne. It includes a new floating terminal and extended pier to allow LNG cargo ships to dock and turn, and regasification and treatment plants to store and convert the LNG back into gas, to be fed into the network via a new 7km pipeline. Once built, the terminal will operate for about 20 years. As well the terminal, pier and pipeline infrastructure, the plan requires about 490,000 cubic metres of seabed to be dredged for cargo ship access. Sign up to get climate and environment editor Adam Morton's Clear Air column as a free newsletter The site is located next to the Port Phillip Bay (Western Shoreline) and Bellarine Peninsula Ramsar Site, a wetland of international significance that regularly supports 20,000 or more waterbirds and contains seagrass beds that are a nursery for fish. Before it can proceed, the plan still has to gain approval under federal environmental laws, and other technical and heritage consents. Victoria uses a lot of gas – about 180PJ a year – with the largest share used in buildings, mostly for space heating. That demand is declining as homes and businesses switch from gas to renewable electricity, and as the share of renewable energy grows towards Victoria's target of 95% by 2035. But the Australian energy market operator (Aemo) is still expecting gas shortfalls in Victoria from 2029, due to dwindling gas supply from fields in Bass Strait, and as coal-fired power stations prepare to close. This leaves Victoria more heavily reliant on gas piped in from the north: New South Wales, Queensland and South Australia. 'It's all interconnected,' says Monash University engineer Graham Palmer. 'But the peak demand for gas in winter is greater than what the pipelines can deliver from the north.' One solution to that gap is to use less gas, hesays, although the process of transitioning the state's 1.7m homes with gas heating to efficient electric alternatives would be likely to take many years. The other option in the short to medium term is to store more gas in Victoria, he says – or, as the terminal proposal will allow for, import it as LNG from other states. 'Unfortunately, we're going to be dependent upon gas for some time,' Palmer says. 'On the one hand, there's the motivation to get off all fossil fuels, but we can't do it instantly, and this is the challenge. 'People interested in climate change are trying to grapple with the challenge of trying to manage these trade-offs.' Kevin Morrison, an Australian gas analyst for the Institute for Energy Economics and Financial Analysis, says the process of freezing gas into LNG and converting it back is inefficient and emissions intensive. Australia has plenty of gas, most of which is exported as LNG, Morrison says, and about 8% of the gas used to make LNG is consumed in the process of freezing the gas to liquefy it for export. 'The side-effect is that the whole LNG supply chain is much more emissions intensive, because you are using all this energy.' The Australian Industry Group said the import terminal's approval was a boost for industry in Victoria, particularly given reliance on gas as a fuel source. 'While overall state gas use is gradually shrinking, Victoria's heavy industry, in particular, relies on gas and there is real concern that gas supplies could run short in the state within a few years,' Ai Group's Victorian head, Tim Piper, said. 'We need an all-of-the-above energy strategy to avoid that. An import terminal is one important tool in the belt, along with expanded north-south pipelines, local supply development, alternative supply from renewable gas, and efficient electrification.' 'Renewable gas' usually refers to a mix of hydrogen and fossil gas. Conservation groups were disappointed by the decision and remain concerned about the effect on emissions and the environment. 'Investing in new gas infrastructure locks us into decades of emissions at a time when urgent climate action is needed,' Jane Spence, a spokesperson for Geelong Sustainability said. Rivers and nature campaign manager at Environment Victoria, Greg Foyster, said: 'As the electricity system shifts to renewable energy, fossil gas could become Victoria's biggest climate problem. The smartest solution remains helping households and businesses shift to efficient electric appliances.'
The Age
4 days ago
- Business
- The Age
Australia's renewable energy shift to be powered by gas
Natural gas will play a bigger role in Australia's shift to cleaner energy as Labor advances plans for new gas-import terminals and industry braces for new rules to force gas exporters to reserve more supplies of the fossil fuel for domestic use. Two controversial decisions this week enraged environmental campaigners who fear increasing gas supplies will make it harder to tackle global warming, but underscored the belief within state and federal governments that more gas is needed to power homes and support renewables when the wind is not blowing and the sun is not shining. Following a four-year delay, Victoria on Thursday finally gave the provisional green light for fuel supplier Viva Energy to build a floating gas-import terminal at the site of its Geelong oil refinery, which aims to bring in shipments of liquified natural gas from Queensland, Western Australia or overseas for use in the local network. The ruling came a day after the Albanese government signed off on a four-decade extension of the North West Shelf gas project on Western Australia's Burrup Peninsula. Federal Resources Minister Madeleine King, meanwhile, is reviewing controls on Queensland's LNG industry to ensure they boost gas supplies for the eastern seaboard. Loading The federal government is looking for ways to head off the worsening threat of gas shortfalls emerging in Victoria and NSW later this decade, as ageing gas fields in the Bass Strait that have long supplied the local market rapidly deplete, with few projects to replace them. Gas industry insiders believe the government could pass reforms to tighten controls on Queensland's three LNG joint ventures through parliament by the end of the year, where it only needs support of either the Greens or the opposition, both of which have previously endorsed domestic gas reservation. A spokesperson for the minister told this masthead that the government would guarantee more gas supply for the eastern seaboard. 'The government will progress the planned review of gas market frameworks and the role of market bodies to ensure more gas is made available for Australians,' they said.
Sydney Morning Herald
4 days ago
- Business
- Sydney Morning Herald
Australia's renewable energy shift to be powered by gas
Natural gas will play a bigger role in Australia's shift to cleaner energy as Labor advances plans for new gas-import terminals and industry braces for new rules to force gas exporters to reserve more supplies of the fossil fuel for domestic use. Two controversial decisions this week enraged environmental campaigners who fear increasing gas supplies will make it harder to tackle global warming, but underscored the belief within state and federal governments that more gas is needed to power homes and support renewables when the wind is not blowing and the sun is not shining. Following a four-year delay, Victoria on Thursday finally gave the provisional green light for fuel supplier Viva Energy to build a floating gas-import terminal at the site of its Geelong oil refinery, which aims to bring in shipments of liquified natural gas from Queensland, Western Australia or overseas for use in the local network. The ruling came a day after the Albanese government signed off on a four-decade extension of the North West Shelf gas project on Western Australia's Burrup Peninsula. Federal Resources Minister Madeleine King, meanwhile, is reviewing controls on Queensland's LNG industry to ensure they boost gas supplies for the eastern seaboard. Loading The federal government is looking for ways to head off the worsening threat of gas shortfalls emerging in Victoria and NSW later this decade, as ageing gas fields in the Bass Strait that have long supplied the local market rapidly deplete, with few projects to replace them. Gas industry insiders believe the government could pass reforms to tighten controls on Queensland's three LNG joint ventures through parliament by the end of the year, where it only needs support of either the Greens or the opposition, both of which have previously endorsed domestic gas reservation. A spokesperson for the minister told this masthead that the government would guarantee more gas supply for the eastern seaboard. 'The government will progress the planned review of gas market frameworks and the role of market bodies to ensure more gas is made available for Australians,' they said.
ABC News
4 days ago
- Business
- ABC News
Gas storage terminal for Victoria gets state government approval
A proposed gas storage terminal off the coast of Geelong with capacity to supply most of Victoria is closer to being built following approval by the state government. The Viva Energy Gas Import Terminal Project is designed to shore up the state's gas supply before a forecast shortfall by 2029. The project would consist of a liquefied natural gas (LNG) storage ship docked in Corio Bay off Refinery Pier, and 7 kilometres of new pipeline to link up to the existing gas network. Viva Energy is yet to say if it will go ahead with the project, with the company still assessing the business case. The Victorian government is not responsible for funding the project, but has a role in providing the necessary approvals for it to proceed. Among these is environmental approval via an Environmental Effects Statement from Planning Minister Sonya Kilkenny, which she announced on Thursday. Ms Kilkenny found "the potential impacts of the project can be managed with strengthened environmental management practices and [if] amended mitigation measures are adopted", a government statement read. "If successful, the Viva Energy Terminal can receive up to 160 petajoules (PJ) of liquefied natural gas (LNG) per annum — approximately 88 per cent of Victoria's 2024 gas consumption." The project is intended to be a cost-effective solution for the vast majority of Victorian households reliant on gas-powered cooking and heating. Viva Energy said construction of the gas import terminal would take two years, but has not said yet when construction would start as the project is yet to get the final go-ahead. The project would enable gas from from Australia and around the world to be brought in and deposited in a permanently moored storage unit. "One of the key advantages of our LNG terminal is its flexibility to scale up supply during periods of peak gas demand, ensuring that households and businesses in Victoria will have a reliable gas supply all year round," Viva Energy's chief strategy officer, Lachlan Pfeiffer, said. He said the new gas terminal would provide "important firming capacity to support the renewable energy sector as coal retires from the energy system". Mr Pfeiffer said the company would now work to lock in large-scale gas market participants in order to firm up the business case for a final decision on whether the project could proceed. Victoria is facing a looming natural gas shortage because supply traditionally taken from Bass Strait is running out. The Australian Energy Market Operator (AEMO) has forecast a supply shortfall by 2029. Mr Pfeiffer has previously said the terminal was the only complete gas solution for Victoria that could be delivered in time for predicted shortfalls in the winter of 2028. The proposed gas project, a few hundred metres off the Geelong shoreline, has attracted vehement opposition from locals and environmental groups who have argued it will be located too close to homes and businesses. The Victorian Greens condemned the state government for giving its approval, saying the party had been campaigning against the project alongside local communities since 2022. "Victorian Labor have turned their backs on our bay environment, on the health and safety of communities in Geelong, and on our climate," Deputy Victorian Greens leader Sarah Mansfield said.
Reuters
4 days ago
- Business
- Reuters
Australia's Viva Energy gets green signal for proposed Geelong LNG terminal
May 30 (Reuters) - Viva Energy Group ( opens new tab said on Friday the Victorian government has cleared the construction of its liquefied natural gas (LNG) terminal project in Geelong, amid growing concerns over a potential gas shortage in Australia. The Australian government has been actively seeking gas supply commitments to help close the gap between supply and demand, following a warning from the country's competition regulator that the east coast may face a longer-term shortfall. "We believe the LNG terminal is vital to ensure the secure supply of gas to the south-east market," Chief Executive Scott Wyatt said. The fuel retailer said that the current timeline targets first gas delivery from the proposed project in time for the Victorian winter of 2028.
