LNG Gas Import Plan Faces Further Delays

Australia's federal and state energy ministers have delayed a key decision on Victoria’s proposal to support the construction of LNG import terminals. The plan is intended to address expected gas shortages by 2028. However, with major states expressing concern and no new meeting set until at least August, this delay risks leaving consumers vulnerable to price increases.

Victoria is promoting a strategy to import liquefied natural gas (LNG) as its local supply continues to decline and future shortages approach. The proposal calls for the Australian Energy Market Operator (AEMO) to receive special powers to support new LNG import terminals. This would enable quicker access to global gas supplies and help stabilise the local market, especially during the colder months when demand typically rises.

Not all states support the idea. Queensland, South Australia and the Northern Territory have raised concerns about being burdened with the financial consequences of Victoria's choices. These states note that Victoria has restricted its own gas development. There is currently no agreement on how to share or recover construction costs, which has caused a standstill in government progress for at least another month.

Although no decision has been made, energy experts warn that failing to act now could have national consequences. AEMO has projected major supply gaps by the end of the decade. Any further delay could limit solutions later. Victoria has already approved one LNG import terminal in Geelong while another project in Port Phillip Bay remains under review. Both depend on a national infrastructure strategy.

The federal government is expected to begin a broader review of east coast gas policies soon. This review could change how domestic supply is managed and how much gas may be diverted from export-focused operations in Queensland. At the same time, a $36.4 billion foreign takeover bid for a major Australian gas company has added urgency and increased political pressure around energy security and export limits.

Source: Australian Financial Review, Viva Energy, Pipeline & Gas Journal, Premier of Victoria