Viva Energy will keep its fuel production at its Geelong refinery until at least 2028 under a new deal with the federal government.
Industry, Energy and Emissions Reduction Minister Angus Taylor announced last week the ongoing operations of Viva Energy had been secured through a funding agreement with the government.
He said the refinery had received a $12.45 million payment for the first quarter of the 2021-22 financial year under the Fuel Security Services Payment.
In return, Viva Energy has extended its commitment to producing fuel at its Geelong refinery until at least June 30, 2028, with an option to extend the commitment into the 2030s.
Viva Energy chief exeucitve Scott Wyatt said the company was proud of the role it played in ensuring Australia’s energy security.
“Viva Energy’s refinery at Geelong has produced fuel to meet the energy needs of Australians for almost 70 years. Up to a third of the crude oil comes from local oil fields and we supply around 50 per cent of total Victorian demand. We are proud of the role we play in serving our community and supporting the country’s energy security,” he said.
“Throughout the pandemic, Viva Energy worked closely with the federal government to establish a framework that addressed the economic headwinds faced by the refining sector and encourage substantial investment to improve efficiency, fuel standards and increase storage to further enhance the country’s energy security. We appreciate the proactive support shown for our sector and acknowledgement of the importance of sovereign manufacturing capability.
“Under the federal government fuel security package, Viva Energy has committed to undertake substantial investment to upgrade the refinery to produce ultra-low sulphur petrol (to support lower emission vehicles) and construct 90 megalitres of diesel storage to improve energy security.
“Viva Energy has plans to extend our refinery operations and create a broader Energy Hub to support energy security and the development of new energies which will safeguard existing refinery jobs as well as delivering new jobs for the Geelong region.”
Geelong-based senator Sarah Henderson said package ensured the future viability for 700 jobs at the refinery.
“The boost to Viva’s bottom line of more than $12 million is a massive win for our region and for vital manufacturing jobs,” she said.
Under the Fuel Security Services Payment, refiners are paid a variable payment based on the volume of key transport fuels produced in each quarter from July 2021.
The rate of payment is tied to external market conditions and other operating factors.
The rate ranges between zero and 1.8 cents per litre.
