Viva Energy’s proposed gas terminal in Victoria’s Geelong is no longer certain to proceed despite clearing state and federal approvals, after the $5 billion listed company warned the Albanese government’s gas reservation plan had created too much uncertainty.
The government last week watered down its gas reservation plan – requiring liquefied natural gas exporters to reserve up to 20 per cent of their supply for domestic markets rather than the fixed 20 per cent it originally proposed – but the gas industry warns the plan still risks destroying investment.
Petrol and diesel supplier Viva Energy, owner of the Shell service station network, has spent six years planning its $350 million Geelong gas terminal, which is designed to supply up to 160 petajoules of gas annually, or 90 per cent of Victoria’s yearly demand ahead of anticipated winter shortfalls in 2029.
The project passed federal environmental approvals in April, clearing one of its final regulatory hurdles. But Viva told The Australian Financial Review no final decision had been made, despite several industry sources claiming the project had been put on hold.
“Viva Energy continues to monitor the market conditions necessary for this project to proceed to a final investment decision,” a Viva spokesman said.
“Policy certainty in the gas markets will be important to secure long-term customer offtake, and we note this is evolving with the recent release of the Gas Reservation Bill, which we are currently assessing.”
Victorian Opposition spokesman on energy David Davis said the uncertainty showed Labor’s energy plan was in chaos.
“The anti-gas agenda has left Victoria exposed,” Davis said. “After 12 years of Labor, energy policy is in chaos. Victoria faces looming shortages of gas and electricity, after exploration has been effectively stalled for 12 years.”
“If elected, a new Liberal government will move immediately to open up gas exploration but does not count out a role for terminals and storage playing a complementary role.”
Victorian Energy Minister Jaclyn Symes rejected the Liberals’ plan. “This fantasy that there is an abundance of gas that can be brought online is such a hoodwink to the community,” she said.
The Australian Energy Market Operator has forecast that Victoria will have a gas shortfall by 2029 as the Bass Strait wells deplete.
The Victorian government said it would continue to talk to Viva about the Geelong project. “We’re supportive of securing reliable gas supply for Victorians as Bass Strait’s traditional supplies decline, and have a keen interest in projects that can help meet our future needs,” a spokeswoman said.
“We’ll continue conversations with Viva, industry and the Commonwealth about securing Victoria’s future gas supply.”
Ports Victoria said in a statement that the project’s future was a matter for Viva Energy.
But two industry sources, speaking on the condition of anonymity to disclose private conversations, said Ports Victoria had imposed further requirements on Viva for the Geelong project, which was another factor in reconsidering the project.
A technical review by maritime experts DNV excluded Geelong’s Corio Bay as a viable option for an LNG terminal because of the extent of dredging that would be required.
Dutch terminal operator Royal Vopak, which operates 78 terminals across 23 countries, says it is proceeding with an alternative proposal for a floating terminal in the middle of Port Phillip Bay.
The Vopak proposal was the subject of a state government inquiry in August, with the company expecting a final decision in October.
Vopak’s terminal would be 19 kilometres offshore from Avalon and would enable liquefied gas carriers to use a floating storage regasification unit to enable imported gas to flow directly into a current pipeline system without any dredging of Port Phillip Bay.
The floating terminal could supply more than 200 petajoules a year, fully meeting Victoria’s projected peak winter shortfall in 2029, according to Vopak.
Extracted in full from: https://www.afr.com/companies/energy/viva-energy-reconsiders-decision-on-geelong-gas-terminal-20260914-p60x6l
