Devil in the detail over Jacinta Allan’s approval of Viva Energy LNG import terminal

An LNG tanker arriving in Gladstone Harbour. A report says navigating the 31km shipping channel into Geelong’s Corio Bay could be ‘challenging’. Picture: Mike Richards

Victorian Premier Jacinta Allan was at great pains to use the state government’s approval of Viva Energy’s LNG import terminal to hit back at Kevin Gallagher’s “North Korea” crack this week.

But scratch the surface and there’s enough spin going on to make the Hermit Kingdom proud.

While noting that “further regulatory approvals” might be needed, Allan’s comments on the Viva approval to a Victorian Chamber of Commerce and Industry function on Thursday, night – and Planning Minister Sonya Kilkenny’s press release on the subject – made light of what they might be.

Instead, both were heavy on the rhetoric that Victoria Labor was “working to drive down Victorians’ energy bills and secure the gas supply Victoria needs”.

Given the looming gas supply shortage in Victoria from 2028, there’s still enough time to solve the problem if everyone gets cracking. But there’s a problem, made painfully clear in the detail of the 227-page assessment approved by Kilkenny this week.

Victorian Premier Jacinta Allan. Picture: NewsWire / Aaron Francis

What Kilkenny approved is effectively the landside infrastructure and the berth for LNG carriers, along with some minor dredging work around the wharf.

But there are concerns that the 31km shipping channel into Geelong’s Corio Bay isn’t wide or deep enough for LNG tankers.

“Navigating the Corio Bay channels can be challenging due to tidal influence, which may at times result in insufficient under keel clearance for safe passage of an LNG carrier,” the report says.

Kilkenny’s report notes that regulators have concluded only that navigation through the channel is “technically feasible”, but the planning department’s Inquiry and Advisory Committee (IAC) noted that “extensive additional work” was needed to be sure the shipping channel is up to scratch.

That work, according to Kilkenny’s approval document, is still to be done.

“The EES IAC also noted that extensive additional work, including a study by the Permanent International Association of Navigation Congresses, is needed to confirm that navigation and berthing can be safely conducted in accordance with the standards set by navigation and maritime safety authorities,” the report says.

And what does that mean? Well, if PIANC isn’t satisfied the shipping channel isn’t wide and deep enough, it could need to be dredged and widened. Which would need further environmental impact studies.

Victorian Planning Minister Sonya Kilkenny. Picture: NewsWire / Valeriu Campan

That won’t be a problem, according to Viva chief strategy officer Lachlan Pfeiffer, who told Margin Call on Thursday that the company was confident the channel was usable.

“Corio port channel simulation was conducted early in the project, and the full scope of proposed dredging to deliver the project (ie. the berthing and turning circle for vessels) was scoped and assessed as part of the approved EES,” he said.

“There is no proposal for additional channel dredging. The additional work referenced is to help assess and define the safe navigational parameters for the LNGC fleet, and this scope has been agreed with Ports Victoria.”

But if Viva is wrong, the project will probably die. Or will face massive delays, at the very least, if additional environmental studies are needed.

This isn’t just about the Victorian government’s spin, though that’s bad enough. It’s about the cack-handed process to get to this point. Faced with the need to build an import terminal – or a new gas pipeline – any sane government would have simply run a tender process to identify the best ­location and proponent.

That hasn’t happened.

Instead, the Victorian government – and their federal counterparts – have simply let competing bids spend the time and money to try to prove up their own projects. AGL Energy’s proposed import terminal in Westernport Bay was blocked over environmental concerns in 2021, and Dutch tank storage firm Vopak is still waiting on a decision on its own plans.

All have been working on this for more than five years, and only Viva has progressed even this far.

This week’s announcement might have allowed Allan to claim she was moving to fix Victoria’s gas problem. But it doesn’t actually fix anything, and 2028 really isn’t that far away.