Latest news with #gasstorage
ABC News
3 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.
Bloomberg
4 days ago
- Business
- Bloomberg
Germany Sees High Bar for Gas Storage Intervention If Goals Missed
Germany sees a high bar for any intervention to support gas storage efforts this year, even if the country ends up missing its new legally-binding targets. If liquefied natural gas supplies keep arriving in the country by the start of November, it may not be appropriate for gas market manager Trading Hub Europe GmbH to step in to support injections, even if the nation's storage goals are missed, according to a memo by the economy ministry seen by Bloomberg. Effectively, Germany is aiming to have storage sites 70% full.
Reuters
5 days ago
- Business
- Reuters
German gas pipeline lobby proposes reforms to cut cost of storage
FRANKFURT, May 28 (Reuters) - Germany's pipeline lobby group has proposed a new approach to gas storage, including a permanent national reserve, it said on Wednesday, in an effort to reduce the cost of building up an energy buffer ahead of the European winter. Since the energy crisis linked to Russia's invasion of Ukraine in 2022, European Union countries have turned to increased storage to protect against supply disruption. How the practice is managed in Germany is resonant for the wider bloc as it is the continent's biggest energy market and storage location and is reliant on imports. The new Berlin federal government a month ago changed required filling levels for the coming winter in line with anticipated changes to European Union regulations that allow 80% filling by November 1 instead of 90% previously. Fernleitungsnetzbetreiber Gas' Managing Director Barbara Fischer said the regulatory change helped for the short term, but more was need for the longer term. "We propose a model combining gas supply security with a greater inclusion and responsibility for market players," she said, with reference to gas merchants and shippers on FNB's transport pipeline networks. The lobby group's proposal involves setting up a permanent gas security reserve held underground, where Germany for example can store a quarter of its annual requirements. That would relieve the pressure for seasonal filling targets that have in many cases obliged utilities to pay elevated prices as market participants knew they needed to buy. In addition, the group is also proposing that shippers would be obliged to always hold or store sufficient volumes to serve at least their retail customers. It said this would spread the need to back up orderbooks more evenly over the year and help to discourage any speculative spikes on the market.
Yahoo
19-05-2025
- Business
- Yahoo
EU gas storage refill cost to rise by €10bn after winter
The cost of replenishing the EU's gas storage facilities after a cold winter, which depleted its reserves, is set to increase by at least €10bn compared with the previous year, reported the Financial Times. This increased expenditure is necessary to meet the EU's mandate of refilling storage to 90% capacity each summer, a policy implemented following Russia's invasion of Ukraine in 2022 to mitigate disruptions during cold months. Following this winter, Europe's gas reserves were two-thirds depleted by March, necessitating considerable effort and expenditure over the summer to replenish them to standard levels. Allianz Trade analyst Ano Kuhanathan noted that Europe experienced its first true winter since the conflict in Ukraine, with a shortfall in wind-generated renewable energy also contributing to heightened gas consumption. Although current gas prices are lower due to reduced demand from China, Kuhanathan estimated that the cost to achieve the 90% storage target by November will be €26bn, compared with €16bn for reaching 99% capacity last year. EU nations have recently agreed on a more flexible approach to the gas storage target, responding to criticism that the strict 90% threshold led to summer price surges as countries hastened to fill their reserves. Potential revisions to the legislation could see the target lowered by 7%, introducing uncertainty into this year's refill strategy, with the amendments likely not in effect before summer. Eurogas, the representative body for the gas industry, stated that policymakers must guarantee clear and timely communication regarding the measures, adding that storage obligations pose the risk of further intensifying the issue of high and volatile wholesale gas prices. Kuhanathan highlighted that the EU's gas and liquefied natural gas (LNG) imports amounted to roughly €100bn in 2024, underscoring the importance of ample reserves in stabilising prices and avoiding market competition during winter demand spikes. Equinor Gas Trading vice-president Peder Bjorland stated that Europe would face higher costs to secure gas over the summer, competing against China and other Asian consumers. China, the world's leading purchaser of LNG, has recently reduced its gas imports due to favourable weather conditions and a less optimistic economic outlook. However, a temporary ceasefire in the trade conflict between Beijing and Washington, announced this month, may lead to an increase in economic activity and, consequently, gas demand, the report stated. Last week, Bjorland said that Europe may need to uphold competitive pricing to secure the additional 30 billion cubic metres of LNG necessary to replenish its gas storage levels. "EU gas storage refill cost to rise by €10bn after winter" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
18-05-2025
- Business
- Telegraph
Britain's biggest gas storage facility faces closure unless ministers step in
The chief executive of British Gas has warned that Britain's biggest gas storage facility will be shut down unless ministers agree to help fund the loss-making site's redevelopment. Chris O'Shea, the chief executive of British Gas-owner Centrica, warned that the Rough facility in the North Sea, which represents half of UK's natural gas storage capacity, would be decommissioned unless the government agreed to underwrite its £2bn overhaul. Centrica is seeking to redevelop the 40-year-old site to be able to store hydrogen alongside natural gas. The company has asked ministers for a so-called cap-and-floor mechanism to help fund the project. While Centrica would provide the investment up front, the mechanism would effectively mean guaranteed funding underwritten by a levy on consumer bills. Without state support, Mr O'Shea said Rough would face closure. Centrica has already stopped filling the facility off the Yorkshire coast amid concerns about the site's financial viability, prompted by a fall in wholesale gas prices. Mr O'Shea told the BBC: 'Inevitably what will happen is this asset will be decommissioned. It will be shut down, we'll remove everything that we've got here, it will be like it was never here, and then we'll lose this resilience.' The site, which lost £100m last year year, can hold enough gas to meet Britain's needs for six days – half the total 12 day capacity the nation has overall. If upgraded, Rough could provide up to 30 days of supplies. If it shuts, the nation's reserves could drop to just 6 days, compared with around 100 in Germany, France and the Netherlands. Gas is envisaged to comprise up to 5pc of the UK's energy demand by 2030, even under the Government's plan to shift to a clean power system by the end of the decade. A government spokesman said: 'The future of Rough storage is a commercial decision for Centrica, but we remain open to discussing proposals on gas storage sites, as long as it provides value for money for taxpayers.' Mr O'Shea also warned that Ed Miliband's plan to establish a clean power grid by the turn of the decade risked failing. He said achieving the 2030 target will be 'very challenging'. The Centrica chief said: 'It's not impossible but it's not easy. I can't say, hand on heart, that we'll get there.' While the target might be attainable 'if we all pull in the same direction,' it represented the sort of extremely ambitious goal that Centrica sometimes sets for its own people without certainty of success. He said: 'The reality is it might not be just where we want to be by 2030. But probably by having that very stretching target we will be a lot closer than we would otherwise have been.' Doubts over the achievability of the Government's net zero targets are adding to pressure the Energy Secretary faces to temper the pace of Britain's transition to renewables. Analysts at consultancy Cornwall Insight warned in January that just two thirds of the solar and onshore wind power needed to achieve Mr Miliband's goal would be ready by 2030. The Energy Secretary has already diluted other green policies, including a ban on new non-electric cars by 2030, amid a growing backlash from voters, unions and Labour MPs. Mr Miliband is also reviewing plans to erect thousands of pylons across the countryside, The Telegraph has revealed. Mr O'Shea's warning about the risks to the 2030 target comes days after he said the shift to net zero would not cut household energy bills, despite promises from the Labour Government. The British Gas chief wrote on LinkedIn that the shift to renewables 'will NOT materially reduce UK electricity prices from current levels'. During last year's election campaign Mr Miliband promised that the shift to clean energy would save households £300 per year by 2030. Speaking on the BBC's Sunday with Laura Kuenssberg programme, Mr O'Shea reiterated his concerns about such price promises. He said: 'The thing that frustrates me is that we will have people who give sound bites, but it might not be backed up by fact. You see this become a Left versus Right thing. 'New renewable development will not bring down the price. If we have a clean energy system that people can't afford to pay their bills, we will have failed.' A government spokesman said: 'As shown by the National Energy System Operator's independent report, our mission for clean power by 2030 is achievable and will deliver a more secure energy system, which could see a lower cost of electricity and lower bills.'
