AGL sticks to ‘complex’ Crib Point gas project
Power giant AGL Energy has conceded it underestimated the challenge of developing Australia’s first gas import plant.
Power giant AGL Energy has conceded it underestimated the challenge of developing Australia’s first gas import plant, with the project delayed partly due to mounting environmental opposition from communities in Victoria’s Mornington Peninsula.
AGL had originally targeted imports from its planned $250m Crib Point liquefied natural gas terminal in the first half of 2020 as part of efforts to help ease a domestic supply crunch in the state and meet a gas shortfall in its own portfolio.
However, opposition from local groups and a decision by the Victorian government to conduct a full environmental assessment on the facility slowed momentum, with first gas now likely in the second half of 2022.
“A project that seemed simple: a jetty and a pipe is far more complex and has far more challenges in relation to how a community views a project like that,” AGL’s general manager for energy supply and origination, Phaedra Deckart, told a CEDA forum on Monday. “We take the community concerns very seriously and that’s why it’s taken longer than we had expected to make sure we completed a robust environmental process and responded to the community concerns.”
AGL now expects the environmental impact statement to be displayed in May, followed by public hearings and an eventual decision by the Victorian government on the project before the end of the year.
The electricity operator said last week that while Crib Point “remains compelling” given demand for gas in southern markets, the timing and cost is likely to be affected by the increased complexity of the project as it looks to secure environmental approvals.
Ms Deckart said the project stacked up given high seasonal demand for gas in Victoria.
“I think that any major project has complexities,” she said. “So when it reaches the final investment decision and when we get to that stage it will deliver 550 terajoules a day of capacity to the market and up to 750TJs of peaking capacity.”
Victoria’s gas demand over winter nearly tripled in comparison with summer levels, Ms Deckart said. “Across the southeastern states you really are looking at going from a 600TJ-a-day environment to a 1500-2000TJ requirement in winter,” she said. “LNG imports provide something that is very hard to get in the market which is significant capacity and back-up security of supply. I’m obviously a fan of the project.”
Victoria’s government has said the import facility and a pipeline planned by APA Group will undergo an environmental effects statement that will be subject to community submissions and a rigorous assessment.
The study considers the potential environmental, community and cultural impacts of the project including on native vegetation, wildlife, marine life and Aboriginal cultural heritage.
AGL is one of four developers of LNG import terminals targeting east coast gas markets.