Fresh fuel supply fears hosed down after refinery blaze
Officials say a major fire at one of Australia’s two oil refineries will not cause a fuel shortage, and additional imports are planned to make up for the production shortfall.
The fire broke out at the Corio facility in Melbourne’s south-west at around 11pm on Wednesday and took firefighters almost 12 hours to extinguish.
The Viva Energy Geelong refinery supplies more than half of Victoria’s fuel and about 10 per cent of fuel nationwide, according to the company.
Energy Minister Chris Bowen said he was confident the company would be able to cover any production shortfall from the fire with imported fuel, but acknowledged the full extent of the impact on oil production was not yet clear.
“This is not a positive development, it is not good timing and it is a setback,” Mr Bowen told reporters on Thursday.
“But I can assure Australians that government and industry are working very closely together to manage the impacts of this fire.
“Viva is confident that they can replace the affected oil production with imports.”
The fire primarily affected infrastructure responsible for the production of petroleum and aviation gasoline, which is different from jet fuel and is typically used by small aircraft.
Mr Bowen said diesel and jet fuel production was continuing at temporarily reduced levels at the site as a safety precaution.
While investigators are investigating the cause of the fire, incident controller Anthony Pearce from Victoria Fire Rescue said a gas leak was believed to be responsible.
“There was a gas leak from a mechanical component of the system,” he said.
“The gases then appeared to ignite.”
Australian Workers Union Victoria branch president Ross Kenna said there were approximately 25 to 50 workers at the facility when the fire broke out and they immediately took action to extinguish the fire.
“The gas ignited and this created an explosion and fireball,” he told AAP.
“Our members in the field were able to activate the fire suppression systems immediately.”
Speaking from Malaysia, where he is in the process of signing an energy trade agreement, Anthony Albanese described the images of the fire as “very distressing”.
“Obviously this will have consequences, but an accurate assessment will be made in the coming short term,” the Prime Minister said.
“As for the damage, of course that and the consequences for fuel supply will need to be assessed.
“We will continue to work with the company to do everything we can to ensure that everything that is offline is brought online as quickly as possible.”
Malaysia is Australia’s largest supplier of crude oil.
Kevin Morrison, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, said despite government assurances the fire could act like a “second oil shock”, causing prices to rise in the bowser, particularly in Victoria.
“We saw an immediate impact on prices when the conflict started in Iran. You can see almost a similar measure here,” he told AAP.
“Of course it’s not that dramatic, but again we are facing a major supply disruption and when we face such a situation prices normally react upwards.”
The refinery produces more than 120,000 barrels of oil per day, producing gasoline, diesel, jet fuel, LPG, avgas and low aromatic fuel.
Along with Ampol’s Lytton Oil Refinery in Brisbane, the Geelong facility is one of only two domestically capable of refining the fuel.
About 50 firefighters, 10 fire trucks and a boat attended the scene, Fire Rescue Victoria deputy chief fire officer Michael McGuinness told reporters.
No injuries were reported and all employees and emergency responders were conditioned.
Viva Energy suspended trading of its shares on the stock exchange ahead of an update on the damage caused by the fire.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
