When Viva Energy’s proposed terminal was last submitted for approval, it faced strong opposition from environmentalists and some community members who argued it was too close to residential areas and schools, and feared it would jeopardise Australia’s climate ambitions by locking in the use of harmful fossil fuels. In 2022, the Victorian government said, Viva will be asked to provide more information on environmental impacts.
Wyatt expressed confidence on Tuesday that the environmental hurdles could be overcome when the draft is resubmitted for public consultation.
Given looming gas shortages and the typically long lead time for developing new gas fields, an LNG import terminal is one of Victoria’s only options to avert an energy crisis, Wyatt said.
“There is a growing realization that we must continue,” he said.
Another project in NSW, being built by billionaire couple Andrew and Nicola Forrest’s Squadron Energy, is poised to become Australia’s first LNG import facility. Construction of the Port Kembla LNG terminal is almost 100 percent complete, but long-term offtake agreements with potential customers have yet to be signed.
The update on Viva Energy’s Geelong LNG offering came as the ASX-listed company reported a 10 per cent rise in underlying half-year profit to $192 million, while total fuel sales rose 6 per cent to 8.3 billion litres. Convenience store sales fell over the same period as consumers continued to struggle with cost-of-living pressures.
Load
Barrenjoey analyst Dale Koenders said that while gas station sales were expected to pick up in the second half of the year, oil refining margins – the spread between the price of refined fuels and the cost of crude oil – remained weak due to recession fears and were likely to weigh on the refiner’s outlook.
After entering into a deal to buy the OTR petrol station chain from Adelaide-based Peregrine Corporation, Viva is in the process of converting its Reddy Express stores into successful OTR retail offerings, which include quick-service restaurants and convenience stores and are expected to become increasingly important as motorists have to wait longer to charge their electric vehicles.
With the exception of South Australia, each OTR store generates an average of $2.5 million in annual sales, compared to $1.6 million for the Express stores, the company said.
UBS analyst Tom Allen described Viva Energy’s half-year results as solid. The interim dividend is at the upper end of the dividend policy and the expansion of the OTR locations is progressing well.
Vivas shares were expected to perform positively due to the “better than expected” integration update and growth outlook, Allen said, and the company ended the day up 0.7 percent.
The Business Briefing newsletter provides important news, exclusive reporting and expert opinions. Sign up to receive it every weekday morning.
