Dutch tank storage firm Vopak said on Wednesday it was confident in advancing its proposed liquefied natural gas (LNG) import terminal in Victoria, Australia’s biggest gas-consuming state, after laws were passed to ease supply shortfalls.

WHY IT’S IMPORTANT

Vopak’s Victorian Energy Terminal in Port Phillip Bay is one of four proposed across the southeast states to meet domestic gas needs, as regulators warn there could be shortages as soon as 2027.

The projects have progressed slowly due to environmental concerns and regulatory hurdles.

Under the Victorian state government’s reforms, companies like Vopak can secure maritime leases while the project’s environmental assessment process is underway, streamlining approvals. Previously, the assessments had to be concluded beforehand.

CONTEXT

Australia exports more gas than it consumes, but its major reserves are located mostly in the northwest, far from the southeast where most people live and demand is highest.

Vopak’s terminal would allow LNG carriers to use a floating storage regasification unit (FSRU) and supply gas into the current pipeline system without dredging.

It is scheduled to be operational by 2029, after the company signed a front-end engineering design agreement with Hatch Engineering. Discussions with an FSRU provider are also “well advanced”, Vopak said.

KEY QUOTES

Vopak said in a statement the legislative change would “provide security for the Crown maritime lease” it needed and allow it to “undertake its development in the gas import terminal project with confidence”.

“The Vopak Victorian Energy Terminal offers a low impact yet essential solution for securing gas supply necessary to bring greater energy certainty to Victoria and Australia’s eastern seaboard during the transition to net-zero.”

“This will ensure that manufacturers can continue to produce and innovate while the community’s domestic heating and cooking needs are met.”