Vopak joins queue to build LNG import terminal in Australia

MELBOURNE: Dutch oil storage company Vopak wants to build an LNG import terminal in Australia's Victoria state, vying with five other proposed projects to fill a looming gas supply gap in the country's southeast.

Vopak said it wants to dock a floating storage and regasification unit (FSRU) in Port Phillip Bay near Melbourne. It hopes to submit a proposal to the Victoria state government in the third quarter of 2021.

It aims to have first imports after 2024, when the market is expected to face a gas shortfall as the ageing fields that have long supplied the state's needs are rapidly drying up.

"We would like to have the facility operational before Victoria is expected to be facing substantive gas shortages," Vopak Australia Managing Director Fulco van Geuns said in a statement.

Vopak expects the terminal to be able to import up to 50 LNG cargoes annually, with an open access model providing services to LNG suppliers and gas market customers.

"Expectations are that any LNG terminal would need to act as a peak shaver for winter demand in the near term, depending on the profile of decline of domestic gas production in southeast Australia," van Geuns said in emailed comments.

The company has been in talks with potential customers, but did not elaborate due to confidentiality agreements.

Vopak chose Victoria despite two other projects seeking approval in the state - one by top energy retailer AGL Energy and the other by Viva Energy which has a dock at Geelong, not far from Vopak's planned site.

"With reducing domestic gas and the current pipeline capacity from Queensland domestic gas supply sources, Vopak believe that an import terminal makes most sense to be positioned in Victoria," van Geuns said.

AGL is awaiting a final decision from the state government on its A$250 million ($193 million) project within the next few weeks, following an extended environmental review.