Energy breakthrough for Victoria as Viva Energy LNG terminal receives positive assessment

This new infrastructure – an extension to Geelong refinery jetty, a permanently moored floating storage and regasification unit (FSRU) and a short 7 km pipeline connecting it to the state’s gas main – will play a crucial role in maintaining the quality of life for Victorians and ensuring the stability of gas supply in south-eastern Australia.

Victorian Planning Minister Sonya Kilkenny found that, subject to conditions, the project can proceed with acceptable environmental effects.

Viva Energy’s gas terminal would have the capacity to supply in excess of 120 petajoules (PJ) of gas per year and introduce significant new supply capacity: peak supply of up to 750 terajoules (TJ) per day to meet the daily and seasonal gas demands of Victoria and southern Australia. With construction of the terminal expected to take two years, it promises a complete solution to the structural gas shortfalls forecast to impact Victoria from 2028 onwards.

The gas terminal unlocks a pathway to bring LNG from Australian gas fields or around the world, effectively acting as a virtual pipeline to deliver gas directly to where it is needed most – the major Victorian markets of Melbourne and Geelong. In addition to supporting flexible gas-fired electricity generation, it will ensure reliable supply for the more than 2 million households and 65 000 businesses in Victoria that rely heavily on gas for their daily needs and operations.

The terminal’s ability to deliver the cheapest gas available on the global market will provide a substantial economic benefit, ensuring the most cost-effective gas for consumers and businesses alike. Because the project avoids the need for significant pipeline augmentation or duplication, transmission costs will also be minimised.

Viva Energy Chief Strategy Officer Lachlan Pfeiffer described the decision as a milestone for the Viva Energy Hub in Geelong and for Victoria’s energy security.

“Viva Energy’s gas terminal in Geelong is a transformative development for Victoria’s energy landscape, which will ensure a secure, flexible, and cost-effective gas supply, supporting renewable energy generation, and contributing to the economic well-being of Australia,” he said.

“One of the key advantages of our LNG terminal is its flexibility to scale up supply during periods of peak gas demand, ensuring that households and businesses in Victoria will have a reliable gas supply all year round. In addition, we expect the LNG terminal will be called on to supply gas for gas-powered electricity generation, providing important firming capacity to support the renewable energy sector as coal retires from the energy system.”

Mr Pfeiffer said the company would now work to lock in large-scale gas market participants in order to firm up the business case for a final investment decision on the project. “Timing remains a critical factor – we need to hit a range of milestones in order to get the LNG terminal constructed in time to meet the gas shortfall expected to develop from 2028 onwards,” he said.

“We are working closely with potential off-takers and counterparties to secure the commercial structure of the terminal. With construction likely to commence in the second half of 2026, with the majority of works in 2027, various capital and commercial structures are being assessed.”

The terminal is a strategic asset that will not only deliver Victoria’s energy needs but will also support gas demands from South Australia, Tasmania and New South Wales through the interconnected south eastern Australia gas transmission pipeline network.

The gas terminal will be an important component of the Viva Energy Hub, which incorporates the Geelong refinery, strategic fuel storage, a green hydrogen refuelling station, plans for co-processing low carbon liquid fuels and participation in the circular economy through the recycling of waste plastic and tyres. Geelong refinery supplies more than 50 percent of the state’s fuel needs, and with the gas terminal’s capacity to supply more than 60% of the state’s gas needs, the Energy Hub will become a critical gateway to deliver Victoria’s energy requirements, a driver of the economy and a centre for high-skilled jobs in the energy sector.

Viva Energy has a longstanding commitment to providing safe and reliable energy to Australians and this project is a clear demonstration of the company’s determination to continue to meet the evolving energy needs of the state and the nation.

The project will address Victoria’s forecast energy needs by:

• Providing a flexible injection of up to 750 TJ of gas per day into the South West Pipeline to support both peak day and seasonally shaped demand.
• Increasing price competition to the East Coast in an otherwise highly concentrated market, with the ability to source competitively priced gas from Australia and around the world.

   

• The ability to connect the Victorian market for the first time to the significant supply sources in northern Australia – offering sovereign supply security.
• Bringing the gas directly to where it is needed, increasing the overall capacity of the Victorian gas Transmission System thereby avoiding the need to build expensive new major pipelines and storage facilities.
• Remaining in place for as long as market demand requires – when there is no longer sufficient demand for gas, the FSRU would leave the terminal and the jetty would be re-purposed.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/30052025/energy-breakthrough-for-victoria-as-viva-energy-lng-terminal-receives-positive-assessment/