Viva Energy has justified its exclusion of carbon emissions from LNG transportation in its base case environmental statement for its proposed LNG import terminal in Geelong, rejecting the reason it was accused of “climate accounting tricks” by environment groups.
The business model for the $250 million LNG import project means that the terminal’s customers are responsible for sourcing gas, with the result that the emissions associated with LNG transportation are indirect emissions of customers, not of the terminal venture, it pointed out.
Environment Victoria and interest group Geelong Renewables Not Gas accused Geelong of not being transparent on the emissions impact of the project by excluding emissions from transportation. Environment Victoria said Viva was deliberately under-reporting emissions in its Environmental Effects Statement (EES), saying that emissions could be up to 12 times higher than stated.
AGL Energy included emissions from LNG transportation in its now-abandoned Crib Point environmental statement, Environment Victoria pointed out.
But a Viva spokesman said the AGL project involved a different business model, where AGL would have been responsible for sourcing LNG, meaning emissions from transportation would be scope 3 emissions for AGL.
He said Viva’s business model is similar to that of Andrew Forrest’s Port Kembla project in NSW, the environmental assessment which also excluded all scope 3 emissions from their assessment.
The spokesman also noted that Viva had estimated and included emissions from LNG transportation in an appendix in its EES “in the interests of full transparency”.
“We note that this is not a matter of lack of transparency – we have still provided estimated data under two sourcing scenarios in the EES. Viva Energy has approached this project with a sustainability lens throughout.”
The spokesman added that Viva has committed to purchasing certified carbon offsets for all scope 1 and scope 2 emissions, offsetting the direct and indirect emissions from construction and operation of the terminal.
The Geelong terminal is now Victoria’s leading LNG import project after the cancellation of Crib Point, which was blocked by the state government on environmental grounds.
Partners in the venture include Woodside Petroleum, Japan’s Mitsui, France’s Engie and trader Vitol, Viva’s part-owner.
However, the environmental approvals process comes as international LNG prices have surged on the back of Russia’s invasion of Ukraine, which has driven gas buyers around the world to shun Russian supplies.
Benchmark prices for LNG in Asia hit a record last Thursday, jumping 23 per cent to $US59.672 per million British thermal units, pulled higher by a historic rally in European gas prices, according to Bloomberg.
While those prices are well above rates that would make LNG imports into south-east Australia viable, the backers of the several import projects in NSW, Victoria and South Australia say the spike is temporary and it still makes sense to build projects that give access to international gas markets to improve security of supply.
Viva also answered concerns that planned dredging for its Geelong project would harm marine life and could dislodge contaminants from its refinery operations in sediment.
The spokesman said that independent research carried out for the EES found similar levels of contaminants in the sediments in Corio Bay and the spoil disposal site at Point Wilson, and elsewhere in Corio Bay. He described the scope of proposed dredging as “very limited”, saying it was only required to provide for the turning circle of ships at the pier and the berth, not in the channel.
Environment Victoria has also queried the impact of the LNG terminal if the adjacent oil refinery closes. Viva is proposing to recycle seawater used for cooling at the terminal through the refinery, reducing the change in temperature between water used and discharged, but the operation of the refinery is only guaranteed until 2028-2030.
The Viva spokesman said that if the company was no longer able to recycle seawater through the refinery, it would install a diffuser on the jetty that would spread and dilute the impact of the cool water.
“This would result in negligible change in water temperature on the surface and at mid-depth in the water column,” he said, adding that modelling and studies concluded there would be “negligible” harm to the environment.
Extracted from AFR