The Victorian government has rejected a floating gas terminal on the Mornington Peninsula on environmental grounds, raising questions about whether a proposed LNG dock in Newcastle will face a similar hurdle.
Victorian Planning Minister Richard Wynne ruled last week that the proposed AGL import terminal at Crib Point would have "unacceptable impacts" on Western Port Bay, which is listed on the international Ramsar register of significant wetlands.
The minister's decision referred to cold, chlorinated seawater discharges from the regasification process posing an environmental risk in the bay, which includes popular tourist destination Phillip Island and is frequented by fur seals, whales and dolphins.
Newcastle GasDock Company, a subsidiary of South Korean firm EPIK, plans to build a terminal in the Hunter River's South Channel, between the Kooragang Island coal loaders and the Tourle Street bridge.
An EPIK representative said in 2019 that its proposed gas terminal was similar in design to the now-rejected Victorian floating storage and regasification vessel.
The Hunter's lower estuary is also home to a Ramsar-listed habitat, Hunter Wetlands National Park, which straddles both sides of the South Channel about three kilometres upriver from the proposed gas terminal and is the largest wetland reserve within a single estuary in NSW.
Recent government monitoring identified the lower estuary as a "degraded ecosystem" due to largely unfettered industrial pollution in the 20th century, though it said water quality had improved since the BHP steelworks had closed.
The government last year declared the Newcastle gas terminal critical state infrastructure, which gives it high planning priority.
EPIK has not lodged an EIS yet for the Newcastle terminal but announced in October that it planned to add LNG bunkering to the proposed $589 million dock to supply gas as a fuel to the commercial shipping and cruise ship industries.
"The Port of Newcastle, which welcomes more than 2000 ship visits each year, and other nearby ports including Sydney represent high-potential LNG bunker fuel markets with steady and significant marine traffic," the company said.
"The cruise industry in particular has distinguished itself as a major early adopter of LNG as a marine fuel, and EPIK expects that the Sydney Harbour cruise sector, with over 300 annual cruise ship port calls, could require more than a quarter of a million tonnes of LNG annually over the coming years.
"Similarly, bulk carriers, which make up a significant portion of Port of Newcastle marine traffic, could generate considerable new demand for LNG bunker fuel in the region over the coming years."
EPIK said last year that it would make an investment decision about the gas dock in the first half of 2021.
The NSW Independent Planning Commission has since approved Santos' coal seam gas field at Narrabri, a potential market rival for the Newcastle import terminal.
The Newcastle terminal would take about a year to build and could be open by late 2022.
The Australian Industrial Energy consortium won NSW government approval for a floating liquefied natural gas import terminal in Port Kembla two years ago.
The environmental impact statement prepared for AIE said "deterioration of water quality through increased turbidity, mobilisation of contaminants and seawater releases" could affect "marine ecology values".
The Newcastle Herald approached EPIK for comment on the Victorian decision.