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In brief
- Output at the Viva Energy refinery is expected to ramp back up to over 90 per cent of capacity in the coming weeks.
- The company has pledged a full investigation into the cause of the fire.
Australia’s energy landscape is poised for a rebound as one of its key refineries, recently impacted by a catastrophic fire, gears up to resume operations at near full capacity. The Geelong refinery, owned by Viva Energy, is set to revitalize its production lines in the coming weeks following the incident that temporarily halted its activities.
Viva Energy marked its return to the trading floor on Monday after an unexpected fire broke out last Wednesday, causing significant damage to parts of the refinery. The incident occurred in the alkylation unit within the facility’s gasoline complex, with initial investigations pointing to equipment failure as the cause.
In an official communication to the Australian Securities Exchange (ASX), Viva Energy expressed confidence in restoring the facility’s operational capabilities. “Over the next few weeks, and subject to plant inspection, the company expects to be in a position to … lift production of diesel, jet fuel, and petrol to over 90 percent of capacity,” the company stated.
This development promises to bring stability to the fuel supply chain, with the Geelong refinery playing a pivotal role in meeting domestic demand for essential fuels. As repairs and inspections proceed, Viva Energy remains focused on overcoming this setback and ensuring the refinery’s swift return to optimal function.
“Over the next few weeks, and subject to plant inspection, the company expects to be in a position to … lift production of diesel, jet fuel and petrol to over 90 per cent of capacity,” the statement said.
“The refinery is then expected to continue production at these levels until repairs are completed.”
The refinery was at a 60 per cent output for petrol following the fire and at 80 per cent for both jet fuel and diesel.
Viva has promised a full investigation into the cause of the incident.
The company had been in a trading halt following the fire, but resumed on Monday morning.
Viva shares dropped by as much as 9.5 per cent when it came out of the halt and were sitting at $2.38 before noon, down about six per cent.
The Geelong facility is one of only two refineries operating in Australia and provides 10 per cent of the country’s fuel supply and 50 per cent of Victoria’s.
Production had increased at the Geelong refinery amid the Middle East war and the closure of the Strait of Hormuz, which had placed pressure on global oil supply.
Economic support for truckers
The conflict has put strain on trucking companies due to the rise in fuel costs.
From Monday, freight and trucking businesses were able to apply for interest-free loans to help weather the price hikes of doing business.
The loans were part of a $1 billion economic resilience program package and will apply to businesses that make or transport fuels, fertiliser and agricultural products.
The concessions were announced by Prime Minister Anthony Albanese during a speech at the National Press Club earlier in April.
Industry Minister Tim Ayres said the loans would provide stability during volatile economic times.
“Firms in supply chains that are facing escalating costs and short-term cash flow pressures have access to short-term zero-interest loans to make sure that they sustain their businesses through this short-term shock,” he told reporters in Canberra.
“The billion-dollar facility is there to be used as much as it is required.”
Loans of up to $5 million are available for companies with a turnover of less than $100 million.
Australian Banking Association chief executive Simon Birmingham said the financial sector would support the rollout of the loans.
“Banks are stepping up to support the rollout of these zero-interest loans to businesses who are doing it tough as a result of the current conflict in the Middle East,” he said.
“This will be important support for impacted businesses in areas such as freight and logistics, fuel, fertiliser and plastics manufacturing.”
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