Work begins on Victorian gas plant expansion

Expansion works commenced this week at Lochard Energy’s Iona Gas Plant in Port Campbell, Victoria.

The facility has has been a key gas storage operation for almost 20 years and the expansion is set to help secure more reliable natural gas supplies and mitigate short-term price peaks.

Underground gas storage involves injecting natural gas into porous sandstone reservoirs from where it can be retrieved when demand peaks, helping Victorians save on their energy bills.

Victoria’s Minister for Resources Tim Pallas said on Victoria’s coldest days, demand for gas outstrips the amount being processed, so storage reservoirs are integral to consistent supply.

“Expanding underground storage and off-shore extraction will boost the reliability of gas supply in Victoria, and reduce short-term price peaks, particularly during winter,” he said.

The expansion is authorised under Lochard Energy’s existing licence and is not subject to the conventional onshore gas moratorium – in place to 2020 – as it does not relate to the extraction of new gas.

The processes used at the Iona Plant do not relate to fracking or unconventional processes, which were banned in Victoria by the Andrews Labor Government.

The state government’s Victorian Gas Program (VGP) is undertaking scientific investigations on the potential for more underground gas storage between Warrnambool and Port Campbell to help alleviate future demand peaks.

The VGP will encourage new commercial offshore gas exploration through the release of blocks in state waters between Port Campbell and the South Australian border.

“The Victorian Gas Program is delivering a better picture of Victoria’s potential gas resources, to potentially expand supply in the future,” Minister Pallas said.

“We’ve banned fracking and are focusing on safe, tried and tested methods to improve access to natural gas and lower the state’s energy costs.”

Last month, Cooper Energy drilled the first new well offshore from Victoria since 2012.

From 2019, Gippsland’s Sole gas field will deliver enough additional annual supply to power a city the size of Geelong for an entire year.