Australia's Viva Energy presses state to approve LNG import terminal

Waypoint REIT

05/08/2022 09:50

By Sonali Paul
    MELBOURNE, Aug 5 (Reuters) - Viva Energy  VEA.AX  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.
 urn:newsml:reuters.com:*:nL3N2XH3QK
    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.
 urn:newsml:reuters.com:*:nL1N2ZC0G3 
    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.  urn:newsml:reuters.com:*:nL4N2MQ1CA
    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; Editing by Tom Hogue)
 ((Sonali.Paul@thomsonreuters.com; +61 407 119 523;))