Fire-hit refinery output to reach 90 per cent in weeks
Production at one of Australia’s two refineries damaged by a massive fire is expected to return to near full capacity in the coming weeks.
Viva Energy, which owns the Geelong refinery, resumed trading on Monday after a fire broke out in parts of the facility on Wednesday.
The fire occurred in the alkylation unit at the refinery’s gasoline complex and the cause of the fire was an equipment malfunction, the company said.
In a statement to the ASX, Viva Energy said capacity would be increased at the facility.
“Within the next few weeks and subject to facility inspection, the company expects to be in a position to increase diesel, jet fuel and gasoline production to over 90 percent of capacity,” the statement said.
“The refinery is expected to continue producing at these levels until repairs are completed.”
After the fire, the refinery’s oil production was at 60 percent, and jet fuel and diesel production was at 80 percent.
Viva promised a thorough investigation into the cause of the incident.
The company had ceased trading following the fire but resumed on Monday morning.
Viva shares fell as much as 9.5 percent when it emerged from the halt and were down nearly six percent at $2.38 by mid-afternoon.
The Geelong facility is one of only two operating refineries in Australia and supplies 10 per cent of the country’s fuel supply and 50 per cent of Victoria’s fuel supply.
Production was increased at the Geelong refinery following the Middle East war and the closure of the Strait of Hormuz, which put pressure on global oil supply.
The conflict has strained trucking companies due to rising fuel costs.
Starting Monday, shipping and trucking businesses were able to apply for interest-free loans to help weather price increases that come with doing business.
The loans were part of a $1 billion economic resilience program package and will be applied to businesses that produce or transport fuel, fertilizer and agricultural products.
The concessions were announced by Prime Minister Anthony Albanese during a speech at the National Press Club in early April.
Industry Minister Tim Ayres said the loans would provide stability during volatile economic times.
“Firms in the supply chain facing rising costs and short-term cash flow pressure have access to short-term zero-interest loans to enable them to continue their business through this short-term shock,” he told reporters in Canberra.
“The billion-dollar facility is there to be used as needed.”
Loans of up to $5 million can be provided to 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 loans.
“Banks are stepping in to support the provision of these zero-interest loans to businesses that are making this difficult due to the current conflict in the Middle East,” he said.
“This will be a significant support for affected businesses in areas such as transport and logistics, fuel, fertilizer and plastic production.”
