About Victoria Energy Terminal

Victoria Energy Terminal is a low-impact solution to ensure Victorians have energy while gas is still needed.

A floating import terminal in Port Phillip Bay 19 kilometres offshore from Avalon would process liquified natural gas (LNG) and connect it using an underwater pipeline to feed into the existing supply onshore.  

A floating storage and regasification unit (FSRU) avoids the need to build long-term gas infrastructure on land and can hold enough gas to meet Victorian demand for a week. 

It would be moored for 10 to 20 years – however long it is needed. Importing LNG allows for a reliable supply from the global market, that can scale up and down to meet Victorians’ gas needs.  

At a glance

  • 500 jobs during construction, up to 80 direct full-time jobs while operational

  • Facility targeted to be operational by 2028

  • Will run for a minimum of 10 years

  • Bridges the energy gap to renewables

  • FSRU moored 19km from Avalon shore

 

Benefits to the community and Victoria

The project will provide households, businesses, and industries with access to new sources of natural gas in Victoria and across southeastern Australia. It will underpin energy supply security by providing access to both the Australian and international LNG markets to complement local production in SE Australia as Victoria transitions to a renewable energy future. 

The project will generate employment opportunities both directly related to its construction and operation and indirectly through increased demand for goods and services—around 500 jobs during construction and approximately 80 jobs during the operational phase. Some expertise will be imported from overseas and interstate, but the majority will be employed locally in vessel operations, construction, maintenance, plumbing, and electrical. 

 

About the energy terminal

The Victoria Energy Terminal will use a floating vessel - a Floating Storage Regasification Unit (FSRU) - moored at an existing anchorage point in Port Phillip Bay, approximately 19km directly offshore from Avalon. The location of the site minimises the visual impact on local residents and communities.

The FSRU will receive liquefied natural gas (LNG) from import tankers, re-gasify it onboard, and transfer the gas via a subsea pipeline in Port Phillip Bay. The pipeline will transition onto farmland managed by Melbourne Water before connecting directly into the Victorian Transmission System.

It is estimated that there will be 20-50 deliveries a year, depending on how domestic supply from existing fields declines over the next decade, together with the speed of transition to new energy sources. Supply ships usually berth for 24 hours to unload the LNG.

An LNG tanker can be up to 300 metres long – similar in size to the FSRU, which is equivalent in size to a large cruise liner and stores up to 170,000 m3 of LNG (approximately a week of gas demand in winter for Victoria).

The terminal infrastructure will be designed with the future in mind, with the potential to import hydrogen.

  • Cruise Ship

    335m

  • LNG Carrier

    300m

  • Spirit of Tasmania

    194m

  • Passenger Ferry

    60m

  • Sail Boat

    10m

 

 About the site

Vopak spent considerable effort reviewing sites in Victoria before settling on Port Phillip Bay. This is the preferred location as it appropriately balances environment, marine and social amenity considerations, and will bring minimal disruption to normal bay activities, including shipping movements.

The location means there is no need for underwater dredging, so the sensitive marine environment is protected.

The mooring is approximately 19km east of the proposed shore crossing at Avalon, 10km from the nearest point to the Port Phillip Bay shoreline at Werribee, and 40km from Geelong waterfront and Corio Bay.

An underwater and underground pipeline will transport gas from the FSRU to the Victorian Transmission System (VTS).  It will span 19km under Port Phillip Bay from the FSRU travelling west to arrive onshore.

 

Project infrastructure

The project will include the following infrastructure:

A floating, moored vessel 

The size of a large cruise liner, the FSRU looks like other ships passing through and moored in Port Phillip Bay.  

Mooring dolphins and a marine platform will secure the FSRU. 

Tankers carrying LNG would arrive through the bay’s shipping corridor and moor next to the FSRU. LNG would transfer onto the FSRU where it is turned back into gas and sent into an underwater pipeline to travel to shore to connect into the existing gas network.  

Twenty to 50 LNG deliveries would arrive at the FSRU each year – a small addition to the existing ships that pass through Port Phillip Bay annually.  

Tankers would take about 24 hours to unload.  

Pipeline 

An underwater and underground pipeline will transport gas from the FSRU to the Victorian Transmission System (VTS).  

It will span 19km under Port Phillip Bay from the FSRU travelling west to arrive onshore near Kirk Point at farmland. Trenchless construction for the 1.5km shoreline crossing will protect sensitive bird and wildlife habitats. 

The pipeline will then travel north to connect to the existing gas network at a Gas Receiving Station near Princes Freeway.

Gas receiving station

A new Gas Receiving Station would be built near Princes Freeway. The station will inject nitrogen into the gas and meter gas flowing into the existing South West Pipeline where it will join the east coast gas market.  

The station will be fenced and will include an air separation unit to produce nitrogen on site, rather than trucking or piping nitrogen to the gas receiving station. The station will also include a receiver station to enable inspection of the pipeline to maintain its integrity. 

Transmission line

Victoria Energy Terminal requires energy to convert LNG arriving from ships into gas. Ausnet is working with Victoria Energy Terminal to plan an underground and underwater transmission connection from existing power lines in Lara to the floating unit and the Gas Receiving Station.  

Community feedback through 2022 – 2023 told us it is important to minimise transmission infrastructure wherever possible.  

Based on discussions with landholders and early studies, we are now planning to underground the entire transmission connection within road reserve along either Windermere Road or Peak School Road.   

A new substation will be required to convert energy from existing power lines in Lara to 220kV.  

 

Environmental impacts     

  • Vopak has identified the mooring site approximately 19km offshore from Avalon North to minimise any potential environmental impacts. No dredging is required for the berth or channel.

  • The location means there will be unconstrained marine navigation into Port Phillip Bay with benign met-ocean (combined wind, wave and climate) conditions.

  • We will minimise and avoid construction and infrastructure in areas of conservation at the Western Treatment Plant by using horizontal directional drilling for the shore crossing and pipeline. The timing of this activity will be scheduled around migratory birds to minimise impacts.

  • The mooring of an FSRU in Port Phillip Bay and the associated infrastructure will be subject to strict environmental controls established through an Environmental Effects Statement process, together with stakeholder and Victorian Government.

  • We are aware of a bird sanctuary to the south of the project and a marine farm bordering one of the pipeline routes and will work with those involved in these areas to mitigate any potential impact.

Project timeline

 

 

Meeting Victoria’s energy demand

Victoria is responsible for approximately 45 per cent of the total east coast gas demand. The Australian Energy Market Operator (AEMO) has forecast a structural gas shortage in Victoria by 2028 due to a ccontinued decline in production from Bass Strait compared to demand.

Renewable energy will eventually bridge the gap for energy security, but until then, the state needs a stable and reliable supply of gas.

Importing LNG bridges Victoria’s gas supply position and supports the targets of 50% renewables by 2030 and zero net carbon by 2045, with a considerably smaller footprint than the alternatives of developing new domestic gas in Victoria or large pipeline expansion projects to bring gas from northern Australia.

 The FSRU would have an operating life of up to 20 years to support the state’s transition to renewables. Once the energy gap has been filled, the terminal will be decommissioned, and the floating vessel will depart the Bay. Any permanent assets will be removed where the environmental impact is minimised.