Manufacturing News

Plans for offshore LNG facility to address energy crisis

energy crisis

The development of a floating liquefied natural gas (LNG) import facility off Victoria has been suggested as a means to address rising energy costs.

The Andrews government is allegedly in talks with energy provider AGL to build the LNG import terminal close to Melbourne, potentially in Western Port. The facility would supply to the east-coast gas grid, enabling Victoria, NSW and SA to import lower cost gas from places such as the US or WA.

Labor MP Daniel Andrews is expected to introduce the plan at a government meeting later this week, along with a proposal aimed at helping manufacturers and households access cheaper gas.

Victoria is seen as a preferable location for a floating LNG import facility because it is located between NSW and SA (lowering pipeline costs), and it already has significant storage capacity at its Iona plant.

The idea has seen some criticism, however. University of Melbourne Climate and Energy College research fellow Dylan McConnell told The Age that the facility would be unlikely to influence short-term prices for industrial users, because new gas supplies could take a long time to develop.

The Australian Energy Market Operator also expressed doubts, stating that there would be the increased cost of sourcing new gas, not to mention the geological challenges of extracting it.

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