Australia Approves Viva Energy’s Geelong LNG Terminal as Gas Shortage Looms
(Reuters) — Viva Energy Group said on May 30 the Victorian government has cleared the construction of its liquefied natural gas (LNG) terminal project in Geelong, amid growing concerns over a potential gas shortage in the east coast of Australia.
The Australian government has been actively seeking gas supply commitments to help close the gap between supply and demand, following a warning from the country's competition regulator that the east coast may face a longer-term shortfall.
"We believe the LNG terminal is vital to ensure the secure supply of gas to the south-east market," Chief Executive Scott Wyatt said.
Winter in Australia, one of the world's largest LNG exporters, typically sees peak gas demand due to colder temperatures, with unexpected weather events or power plant outages increasing the risk of shortages.
The fuel retailer said the next step is a final investment decision, and it is currently collaborating with potential partners on structuring the project's debt and equity.
The current timeline targets first gas delivery from the proposed project in time for the Victorian winter of 2028.
Viva Energy's update was "welcome news", particularly in light of a potential surge in electricity bills, said Jessica Amir, market strategist, Moomoo Australia.
Amir, however, said that the approval is unlikely to significantly impact the company's stock price, as it remains largely tied to movements in oil prices.
Viva Energy's shares were trading 0.8% lower, as of 0029 GMT, in line with a nearly 1% decline in the Australian energy sub-index .AXEJ.
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