The planned Crib Point LNG import project in Australia has been ruled out by the state government of Victoria due to potential environmental impacts.

The state's minister for planning, Richard Wynne, said marine discharges from the proposed project would have unacceptable effects on the environment in Western Port, which is listed as a Ramsar wetland of international significance.

“This has been an exhaustive, open and transparent process and this is the right outcome for the local community, the environment and Victoria as a whole,” said Wynne.

Project proponent AGL Energy said it is reviewing and considering its position. The project would have seen a floating storage and regasification unit moored at Crib Point receiving supply from between 12 and 40 liquefied natural gas carriers per year.

An import jetty would have been connected to the existing gas distribution network.

AGL estimated that total committed or incurred expenditure on the project to date is A$130 million (US$99.4 million).

Last month, AGL chief operating officer Markus Brokhof said domestic gas supply availability in the south of Australia was diminishing "and pipelines to key consumption areas look increasingly likely to face capacity constraints".

"We are planning to shift our sourcing strategy to include gas imports notably via Crib Point. We believe Crib Point provides the best mechanism to meet Victorian customer requirements and provides the flexibility to ramp up and down to match demand," said Brokhof.