October 7 , 2022 [Reuters] – Viva Energy on Friday urged an Australian state panel to let it to build a floating gas import terminal to plug a looming supply gap, over heavy opposition from locals worried about fossil fuel use, climate change and damage to marine life.
Viva wants to extend a pier at its oil refinery near Melbourne to park a floating storage and regasification vessel that could receive liquefied natural gas (LNG) to supply to Australia’s biggest gas-consuming state, Victoria.
The company is racing against two other LNG import projects that have received environmental approvals in the states of New South Wales and South Australia, and a third proposed by Vopak (VOPA.AS) at an earlier stage of development in Victoria.
Australia’s competition watchdog this week backed up Viva’s argument about the need for greater import capacity when it warned the country’s southeast faces a gas shortfall in 2023.
Viva aims to start importing LNG in 2024, telling an environmental impact inquiry into its project that a floating storage and regasification unit (FSRU) could help avert an energy crisis “that is likely, if not inevitable”.
“The risk is too great for the opportunity to be squandered,” Viva Energy said in its final submission to the inquiry, which ended on Friday after seven weeks of hearings.
The inquiry panel will provide advice to Victoria’s planning minister within six weeks. The minister then has 30 days to decide on the A$300 million ($210 million) project.
The state government last year rejected a plan by AGL (AGL.AX) to build an LNG import terminal at another location, citing concerns that it would damage wetlands after local communities campaigned against the project.
The panel will have to weigh more than 2,000 submissions, mostly from people opposed to Viva’s project. They raised concerns about prolonging the use of fossil fuels, safety of an LNG import terminal, water quality, noise and the impact of port dredging on sea grass and marine life.
The fight was led by a prestigious private school, Geelong Grammar, located 1.7 km (1.1 miles) away from Viva’s site.
Geelong Grammar said Viva’s environmental studies were rushed and inadequate and that the government should wait to weigh Viva’s plan against Vopak’s to make the best decision.
“In essence, Viva is asking the committee for an environmental blank cheque, which the committee should not sign,” Geelong Grammar’s lawyer Adrian Finanzio told the panel.
Viva’s lawyer Stuart Morris told the panel the company would adopt measures recommended by the state’s Environmental Protection Authority to mitigate any potential harm.
Vopak plans to submit a proposal for its LNG import terminal to the Victoria government for environmental approval in the current quarter, its spokesperson said on Friday.
Viva expects to receive up to 45 LNG tanker deliveries – more than 2 million tonnes a year – to help offset rapidly declining output from offshore fields that have supplied the state for decades.
Environment Victoria, a group which opposes the project, said Viva’s project rationale was flawed as it assumes gas demand will remain steady even as the state is working on a plan to slash gas use by 2030.
State energy minister Lily D’Ambrosio, however, who has been pushing renewable energy developments, left the door open to an LNG import terminal.
“We continue to engage with companies such as Viva about the role gas import terminals could play in that future,” D’Ambrosio said in emailed comments to Reuters.
($1 = 1.4341 Australian dollars)
Reporting by Sonali Paul
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