Viva Energy, Australia's LNG terminal developer, gets approval to build the Geelong LNG Terminal amid fears of gas shortages

Viva Energy Group announced on Friday that the Victorian government had approved the construction of the terminal for liquefied gas (LNG) in Geelong. This comes amid increasing concerns about a possible gas shortage along the east coast.

After the competition regulator of Australia warned that the east coast could face a long-term shortage, the Australian government actively sought gas supply commitments in order to close the gap between the supply and demand.

Chief Executive Scott Wyatt stated, "We think the LNG terminal will be vital in ensuring the supply of gas for the South-East market."

The peak demand for gas in Australia during winter is due to the colder temperatures. Unexpected weather events and power plant failures can also increase the risk of shortages.

Fuel retailer says the next step will be a final decision on investment. It is working with potential partners to structure the debt and equity of the project.

Current timelines target first gas deliveries from the proposed project by 2028, in time for Victorian winter.

Jessica Amir is a market strategist at Moomoo Australia. She said that the Viva Energy update was "welcome" news, especially in light of a possible surge in electricity costs.

Amir said, however, that the approval will not have a significant impact on the stock price of the company, since it is still largely dependent on the movements in oil prices.

Viva Energy shares were trading 0.8% down as of 0029 GMT. This was in line with a decline of nearly 1% in the Australian sub-index for energy.

(source: Reuters)