Viva Energy yet to complete vital works on LNG project, Ports Victoria claims

Ports Victoria says Viva Energy hasn’t adhered to requests it complete works that will ascertain risks to other vessels from a planned LNG import facility at Geelong.

Viva Energy has yet to complete works that are important to ascertain risks to other shipping activities from the company’s planned liquefied natural gas (LNG) import facility, despite the urging of authorities for months, Ports Victoria says.

Proponents insist the facility is vital if Victoria is to avoid a catastrophic gas shortfall.

Viva Energy has proposed extending a pier at the Geelong refinery to moor a vessel capable of carrying LNG, which could be used to supply Victorian homes and businesses during peak-­demand periods.

The Victorian government, facing an imminent supply crunch that could emerge as soon as winter, had been expected to make a ruling on the project by the end of March.

But in a claim that could overshadow the project’s fortunes, Ports Victoria – the authority tasked with managing commercial navigation of the channels in the port waters of Melbourne – said Viva had not done vital studies despite being urged to do so months ago.

In a letter to a Victorian government inquiry on the project, Stuart Christie, the head of development at Ports Victoria, and Nick Ellul, the harbour master at Geelong Ports Victoria, said Viva was asked last year to complete more studies but it ha yet to complete them.

Ports Victoria said that without the information, it could not properly ascertain the risks from a project that it otherwise conditionally supported.

“Ports Victoria has expressed its concerns on numerous occasions during the first (environmental effect statements) inquiry and subsequently directly with Viva.

“We continue to support the project on the basis that Viva can demonstrate safe navigation, and mooring can be achieved in line with international standards and without negative consequences for other users of the ports,” Mr Christie and Mr Ellul said.

To support its claim, the bureaucrats also sent a copy of a ­letter from Ports Victoria chief executive Craig Walker to Scott Wyatt, Viva’s chief executive, in November, when they urged the company to move quickly with studies to avoid any delays.

The Australian understands that Viva accepts there is a need for more surveying, but believes it is not required yet and, critically, it is not a consideration for the state inquiry.

“While shipping and navigational matters are not the subject of the current inquiry, Viva Energy is engaged in an ongoing process with Ports Victoria and committed to progressing any outstanding matters related to the safe navigation and mooring of LNG vessels,” the company said in a statement.

Still, opponents of the project are likely to seize on the Ports Victoria claim, and should Viva be overruled, the prospects for the project will be dim.

Australia’s eastern seaboard is increasingly likely to have rely on LNG imports.

Some influential groups, most notably the powerful private school Geelong Grammar, are already opposed to the development.

However, Victoria is increasingly likely to suffer gas shortages, perhaps as soon as this winter.

The precarious situation has seen Victoria’s Labor government tweak policies in order to prevent supply disruptions.

Victorian Premier Jacinta Allan late last year said her government would fast-track new gas extraction, storage and transmission projects, alongside renewable projects, to “ensure reliable access to gas for Victorian businesses”.

The Australian Competition and Consumer Commission last week conceded the country’s eastern seaboard would soon be reliant on importing LNG cargoes as supplies from traditional sources begin to deplete, which could put upward pressure on prices.

Importing LNG would require more expensive transport, even if spot cargoes can be sourced from domestic exporters in Queensland.

Proponents of LNG import terminals, however, insist global expansion will soon create an oversupply of LNG, which will offset the higher transport costs, when compared to traditional piped supplies.

However, many analysts say a global gut of LNG is probably ­several years away, at the very earliest.

Australia’s Energy Market ­Operator has warned that a shortfall of gas could emerge by winter 2026 and almost definitely by 2028 as supplies from Bass Strait, the traditional dominant supplier to the region, begin to run down.

Originally published as Viva Energy yet to complete vital works on LNG project, Ports Victoria claims