Australian energy company Viva Energy has selected and entered into memorandums of understanding (MOU) with two partners for the development of Geelong LNG facility.
Courtesy of Viva Energy
The partners comprise two consortia, the first being a partnership between ENGIE Australia & New Zealand and Mitsui & Co., and the second between Vitol and VTTI.
Under the terms of the MOU, the partners will work together with Viva Energy with the intention of participating in the forthcoming design and development phase of the gas terminal project. Both consortia will work exclusively (in Australia) with Viva Energy on this terminal development.
Binding commitments as to the capacity, ownership in, and offtake from, the proposed terminal are not covered by the MOU. Offtake deals will be sought at the time of a final investment decision to proceed, Viva Energy said in its statement.
The Geelong site is located within Australia’s largest gas market, has the benefit of an industrial facility and port infrastructure, and providesclose integration into the nearby energy infrastructure, including Victoria’s gas transmission network.
This location and existing usage mean that the project can be implemented with minimal change to the existing site and local amenity.
While the gas terminal will have access to international markets, it will be also able to source LNG from local Australian sources, forming a virtual pipeline for domestic gas into Victoria.
Geelong LNG project clearing key hurdles
The project has also progressed through a number of other key stage gates.
The board of Viva Energy has approved funding for the project to progress through the FEED stage, and the company has lodged its EES referral submission with the Department of Environment, Land, Water and Planning (DELWP).
Viva Energy has now also commenced the tender process for the FSRU charter, a key component to the delivery of the project. Accordingly, the technical design phase of the project has commenced and will progress through 2021, in parallel with the regulatory approvals process.
On the currently scheduled timeframe, a final investment decision could be taken by mid-2022, with gas supply in 2024, in order to service the expected gas supply shortfall in the Victorian market.
This timetable remains subject to securing the commercial arrangements, satisfactory completion of FEED phase, and achieving all applicable regulatory and environmental approvals.
Commenting on the project CEO of Viva Energy Scott Wyatt said “the project will bring new gas supply and competition to our domestic gas markets and is an important part of our wider vision to further develop Geelong as an Energy Hub for Victoria, and to support the transition of Victoria to lower carbon energies.”
He added that the company believes that natural gas will continue to play an important role in providing energy and thereby supporting the further development of lower carbon, but intermittent renewable energy generation.
“As part of the process, Viva Energy will work with the partners on further Energy Hub projects which could be located at the Geelong site,” he said.
Further projects could include solar, gas powered generation, hydrogen manufacturing and other renewable and lower-carbon energy developments.
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Source: LNG World News