Australia’s Viva Energy urges state to approve LNG import terminal

Logo of fuel refiner and distributor Viva Energy, pictured in Corio, Victoria, Australia June 28, 2020. REUTERS/Sonali Paul/File Photo

MELBOURNE, Aug 5 (Reuters) – Viva Energy (VEA.AX) urged an Australian state panel on Friday to allow it to build a floating gas import terminal to bridge a looming supply shortfall, despite strong opposition locals worried about the use of fossil fuels, climate change and damage to marine life.

Viva wants to extend a jetty at its oil refinery near Melbourne to accommodate a floating storage and regasification vessel that could receive liquefied natural gas (LNG) to supply Australia’s biggest gas-consuming state, Victoria.

The company is in the race 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 a stage of development prior to Victoria. Read more

Australia’s competition watchdog this week confirmed Viva’s argument about the need for more import capacity when it warned that the country’s south-east would face a gas shortage in 2023. read more

Viva aims to start importing LNG in 2024, telling an environmental impact survey of its project that a floating storage and regasification unit (FSRU) could help avert a “likely, if not inevitable” energy crisis.

“The risk is too great to waste the opportunity,” Viva Energy said in its final submission to the inquiry, which ended Friday after seven weeks of hearings.

The commission of inquiry will provide advice to Victoria’s planning minister within six weeks. The minister then has 30 days to decide on the 300 million Australian dollars ($210 million) project.

Last year, the state government rejected a plan by AGL (AGL.AX) to build an LNG import terminal at another location, fearing it would damage wetlands after the 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 the prolonged use of fossil fuels, the safety of an LNG import terminal, water quality, noise and the impact of port dredging on seagrass and marine life.

The fight was conducted by a prestigious private school, Geelong Grammar, located 1.7 km (1.1 miles) from the Viva site.

Geelong Grammar said Viva’s environmental studies were rushed and inadequate and the government should wait to compare Viva’s plan to 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 lawyer Adrian Finanzio told the panel.

Viva’s attorney, Stuart Morris, told the panel that the company would adopt measures recommended by the state Environmental Protection Authority to mitigate any potential harm.

Vopak plans to submit a proposal for its LNG import terminal to the Victorian government for environmental approval in the current quarter, its spokesman 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 production from the offshore fields that have supplied the state for decades.

Environment Victoria, a group that opposes the project, said Viva’s project rationale is flawed because it assumes gas demand will remain stable even if the state works on a plan to reduce gas use by 2030.

However, state energy minister Lily D’Ambrosio, who has pushed renewable energy development, has left the door open for 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 comments emailed to Reuters.

($1 = 1.4341 Australian dollars)

Reporting by Sonali Paul; Editing by Tom Hogue

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