The storage expansion project involves drilling an additional well at Iona, which will help secure more reliable natural gas supplies and mitigate short-term price peaks, such as in winter.
Underground gas storage involves injecting natural gas into porous sandstone reservoirs from where it can be retrieved when demand peaks.
The expansion is authorised under Lochard Energy’s existing licence and is not subject to Victoria’s 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.
Meanwhile, the 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.