Power prices hit refinery viability

Rising power prices are among “significant headwinds” confronting efforts to make Corio’s oil refinery viable, according to its operator.
The cost-hit comes as Viva Energy works through a $350 million upgrade program after taking ownership of the refinery from Shell in 2014.
The company has also battled industrial action, including an unlawful week-long blockade in October and strikes earlier last year.
About 700 staff and contractors depend on the refinery for their livelihoods.
Viva Energy chief Scott Wyatt revealed the power-price challenges this week in response to Indy inquiries about the refinery’s progress toward viability.
“We’ve made great progress but it hasn’t been easy and there’s still more work to be done,” Mr Wyatt said.
“We’re also facing a number of significant headwinds that will impact the refinery significantly, such as rising gas and electricity prices and the proposed changes to fuel specifications.
“We’re talking to government about these issues and are encouraged by the engagement we’ve had so far.
Viva Energy continued investing in the refinery as part of “ongoing sustainability efforts” to compete with international competitors, Mr Wyatt said.
“We’ve completed major maintenance, built a new crude tank to improve storage and reduce crude costs, upgraded our pipelines to send more production into Melbourne, and undertaken improvement works right across the refinery to improve reliability.”
Viva Energy this week completed a $250 million purchase of Shell’s Australian aviation fuel business. The Corio refinery is Australia’s only producer of jet fuel.
The aviation fuel purchase would be “really important for the refinery in terms of securing supply”, Mr Wyatt said.