Latest news with #gasimport
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.'
Reuters
4 days ago
- Business
- Reuters
Vopak in talks with partners for Australia LNG import project
SINGAPORE, May 30 (Reuters) - Vopak ( opens new tab has started talks with gas suppliers and offtakers for its liquefied natural gas import terminal project in Victoria, Australia, and expects to take a final investment decision in 2026-2027, a senior executive told Reuters. The global energy storage operator announced last week it was confident in advancing the project in Australia's biggest gas-consuming state after laws were passed to ease supply shortfalls. Paul Kanters, managing director of Vopak Terminals Australia, said operations could begin as soon as 2029 if all the necessary environmental permits and commercial contracts are in place in 2026-2027. Vopak's Victorian Energy Terminal in Port Phillip Bay is one of four proposed across Australia's southeastern states to meet domestic gas needs, as regulators warn there could be shortages as soon as 2027. The global energy storage operator plans to charter a floating storage regasification unit (FSRU) to act as an import terminal to supply gas to the state of Victoria. While Vopak is seeking an FSRU with a capacity of 170,000 cubic metres, it has been "extremely difficult" to secure one after the Russia-Ukraine war drove Europe to secure more floating terminals to import more LNG, Kanters said. "We are in final talks with a FSRU provider to have an FSRU designated for this project," he said. The company aims to start operations at the terminal in 2029 when there will be a structural gas shortage, and would run for at least 10 years, Kanters said. "The Victoria market is somewhat difficult, but sometimes because it's a peak market, you need to build infrastructure to allow for accommodating peak demand," he added. Using an FSRU also provides flexibility for operators to react to Australia's gas needs which may decline if electrification of its economy gathers speed, Kanters said. "The FSRU can simply float away and will not leave any legacy infrastructure sitting there for tens of years that needs to find a home or needs to be depreciated," he added. Australia was the world's second-largest LNG exporter last year after the U.S., shipping over 81 million metric tons of the chilled fuel, according to Kpler data. Its major reserves however are mostly in the northwest, far from the southeast where most people live.
Reuters
7 days ago
- Business
- Reuters
Ukraine hopes to import gas via Transbalkan pipeline at lower transit fee
KYIV, May 27 (Reuters) - Ukraine's energy regulator has approved a gas import mechanism that will avoid high transit fees when supplying gas through the Transbalkan pipeline from Greece to Ukraine, the Ukrainian energy ministry said on Tuesday. Ukraine has faced a serious gas shortage since a series of devastating Russian missile strikes this year, which significantly reduced domestic gas production. Ukraine now imports gas via Slovakia and Hungary, but does not use the southern route because of its higher transit tariffs, as gas from LNG terminals in Greece also passes through Bulgaria, Romania and Moldova. "The Transbalkan route has significant potential to meet Ukraine's immediate needs ... however, this route passes through five countries, and the direct application of regulated tariffs makes it commercially unattractive compared to alternative options," the ministry said in a statement. The ministry noted gas transit operators of five countries had "developed an optimised solution that will, in particular, allow the use of the currently unused capacity of the Transbalkan pipeline to import gas to Ukraine at a competitive tariff." The ministry gave no more details, but added that it hopes for positive decisions from all participating countries on the use of the route. The Kyiv government has said Ukraine needs to import at least 4 billion cubic metres (bcm) of gas for the new 2025/26 heating season while analysts and former officials estimated the imports at about 6.3 bcm. Ukraine's state firm Naftogaz has already started buying, having contracted 300 million cubic metres (mcm) of U.S. LNG from Poland's Orlen, whose supplies go through Poland. The Polish and Lithuanian routes were the cheapest, but Ukraine would also have to use other pipelines as the Polish interconnector allows the import of only up to 7 mcm per day, compared with demand of at least 25 mcm. Ukraine plans to import about 20 mcm of gas from Slovakia, Poland and Hungary on Tuesday. "Having abandoned Russian energy supplies, Ukraine, like our partners in the EU, is actively working to find alternative gas supply routes. The use of the Transbalkan route is important in this context," Ukraine's energy minister German Galushchenko said in a statement.
Reuters
21-05-2025
- Business
- Reuters
Vopak says it is confident in advancing Australia LNG import terminal after state overhauls laws
SYDNEY, May 21 (Reuters) - Dutch tank storage firm Vopak ( opens new tab said on Wednesday it was confident in advancing its proposed liquefied natural gas (LNG) import terminal in Victoria, Australia's biggest gas-consuming state, after laws were passed to ease supply shortfalls. Vopak's Victorian Energy Terminal in Port Phillip Bay is one of four proposed across the southeast states to meet domestic gas needs, as regulators warn there could be shortages as soon as 2027. The projects have progressed slowly due to environmental concerns and regulatory hurdles. Under the Victorian state government's reforms, companies like Vopak can secure maritime leases while the project's environmental assessment process is underway, streamlining approvals. Previously, the assessments had to be concluded beforehand. Australia exports more gas than it consumes, but its major reserves are located mostly in the northwest, far from the southeast where most people live and demand is highest. Vopak's terminal would allow LNG carriers to use a floating storage regasification unit (FSRU) and supply gas into the current pipeline system without dredging. It is scheduled to be operational by 2029, after the company signed a front-end engineering design agreement with Hatch Engineering. Discussions with an FSRU provider are also 'well advanced', Vopak said. Vopak said in a statement the legislative change would 'provide security for the Crown maritime lease' it needed and allow it to 'undertake its development in the gas import terminal project with confidence'. 'The Vopak Victorian Energy Terminal offers a low impact yet essential solution for securing gas supply necessary to bring greater energy certainty to Victoria and Australia's eastern seaboard during the transition to net-zero.' 'This will ensure that manufacturers can continue to produce and innovate while the community's domestic heating and cooking needs are met.'
