Agreement finalised

VIVA Energy has finalised an agreement with the Commonwealth on plans for a new 90 million litre diesel storage facility at its Geelong refinery.

If the project passes environmental approval, it will see the producer take a step towards meeting the Federal Government Minimum Stockholding Obligation that’s recently been imposed on producers in order to shore up Australia’s domestic fuel supplies.

Facilitated by a $33 million federal grant under the “Boosting Australia’s Diesel Storage Program”, the total cost of the project is expected to be between $75-85 million.

“Diesel is vital to Australia’s energy security as it keeps our economy running, it underpins our critical infrastructure, the trucking sector and key industries, such as mining and agriculture,” Minister for Industry, Energy and Emissions Reduction Angus Taylor said.

Viva has been the recipient of several taxpayer subsidised funding streams in recent years, including a one cent a litre “refinery production payment” in 2020 that contributed tens of millions in revenue to the producer at a time it was facing potential closure.

It’s one of two refineries still operating in Australia, the second is Ampol’s Brisbane facility, and is recognised as a key infrastructure site that’s critical to maintaining domestic fuel supplies, currently producing over 50 per cent of Victoria’s and 10 per cent of Australia’s fuel.

It can process up to 120,000 barrels of oil per day and manufactures petrol, diesel, LPG, jet fuel, avgas, bitumen, specialty solvents for a wide range of industries, and Low Aromatic Fuel for the Federal Government’s petrol-sniffing prevention program.

The latest grant is one of 10 announced in July 2021 as part of the Morrison Government’s $260 million investment to expand Australia’s diesel storage capacity.

It “will support industry in meeting its new minimum stockholding obligation but also ensure Australian families and industry can access the fuel they need, when they need it,” the Minister said.
Construction has been contracted to Geelong engineering company, Brockmans, and is expected to create around 140 jobs during the building peak.

Subject to environmental approvals, Viva said it’s looking to start construction on three 30-million-litre diesel storage tanks later this year, with a mid-2024 completion date.