AGL Withdraws Plan To Build Gas Terminal in Victoria

AGL Power Station at Torrens Island in Adelaide, Nov. 4, 2019. AAP Image/Kelly Barnes

Energy giant AGL has formally withdrawn its plan to build a liquefied natural gas (LNG) import terminal in Melbourne just weeks after the Victorian Labor government rejected the company’s proposal.

“The Victorian Minister for Planning found AGL’s proposed project to have unacceptable environmental effects,” an AGL spokeswoman said in a statement.

“As a result, AGL has taken the step of withdrawing the works approval application while it considers its options.”

Notice of AGL’s withdrawal emerged on April 15 after the company notified Victoria’s Environmental Protection Authority of its decision on April 9.

While AGL maintains the Crib Point facility in Melbourne’s Western Port is necessary to meet a potential gas shortfall in Victoria by 2024, Victorian Planning Minister Richard Wynne said the project would instead have “unacceptable impacts” in the area, including Ramsar wetlands.

“This has been an exhaustive, open, and transparent process and this is the right outcome for the local community, the environment and Victoria as a whole,” Wynne said on March 30.

AGL has spent $130 million on this project to date.

The proposal would have seen a 300-metre long floating gas import terminal be built at Crib Point jetty in Western Port, and an associated pipeline span 57 kilometres from Mornington Peninsula to Pakenham.

Detail of proposed gas import jetty works at Crib Point. Victoria Minister for Planning, March 2021

Environment Victoria Analyst Raimundo Miralles told AAP that the Victoria government now “has time to focus on implementing policies that reduce gas consumption, so we don’t need to build terminals to import gas.”

However, ACCC chair, Rod Sims previously warned that Australia was facing a looming gas shortfall in the east coast from 2026, and southern states from 2024, which would affect the majority of Australians if new projects aren’t developed.

Federal Energy Minister Angus Taylor said that while proposals need to meet community acceptance and operate in a responsible manner, he added that a gas shortage, especially in Victoria, “would be damaging to all gas consumers,” the Australian Financial Review reported.

There are currently five sites proposed to import liquefied natural gas (LNG) into Australia: Port Kembla in NSW, Outer Harbor in South Australia, Newcastle in NSW, Geelong in Victoria, and Avalon in Victoria.

According to the Australian Energy Market Operator (AEMO), Andrew Forrest’s Port Kembla LNG import terminal will avert Australia’s gas shortfall by two years to 2026 if the project proceeds.

Despite AGL’s setback, the company’s chief executive Brett Redman says his company was open to deals with other companies to build gas import terminals in south-eastern Australia.

AAP contributed to this report.