Major fire at one of Australia's largest oil refineries near Melbourne slows production levels

A major fire at the Geelong oil refinery near Melbourne in Australia on Wednesday 15 April was extinguished on Thursday lunchtime officials said. It's one of Australia's largest and critical plant's. Authorities said it is still producing jet fuel and diesel but at reduced levels.

State fire authorities said the blaze broke out at a 120,000 barrels-per day refinery run by Viva Energy. The cause of the blaze and the extent of the damage was not clear at the time of writing but it has been reported there are no injuries.

"This is not a positive development, but obviously there's a long way to go in terms of working out just what the impact is," Energy Minister Chris Bowen told Channel Nine. The plant is still producing jet fuel and diesel but at reduced levels for safety reasons, Bowen said.

Viva Energy's refinery supplies more than half of the fuel in Australia's second most populous state, Victoria, and a tenth of the country's total demand.

The company said it expects output of petrol and aviation gasoline will be affected, but it will meet fuel demand through imports.

Scott Wyatt, Viva Energy CEO, told reporters the primary focus was to completely put out the fire that hit operations at two units at the refinery before assessing damage and safely restoring production.

"All the other units are still operating and still in production but they are at minimum rates to maintain safety across the site," he said.

"We'll only start increasing production again once we're confident that we can do that safely."

Viva's shares were on a trading halt pending an update on the impact of the fire.

“I would expect we'd see a price hike depending on the scale of the damage, and secondly, it reinforces the challenges we have in terms of sovereign and resilient capabilities here,” Australian Strategic Policy Institute analyst John Coyne said.

• Australia and Singapore boost energy security ties as Middle East tensions strain fuel supplies
• Australia PM warns of prolonged economic shock over Iran's war, in rare national address
• Australia to halve tax on fuel, amid ongoing Middle East conflict

Fuel security discussions

The incident comes as Prime Minister Anthony Albanese visits Kuala Lumpur on Thursday to discuss securing fuel supplies with his Malaysian counterpart, Anwar Ibrahim, following similar trips to Singapore and Brunei.

"We'll continue to work with the company to do what we can to make sure that anything that is offline is brought online as soon as possible," Albanese said at a media conference in Malaysia's administrative capital, Putrajaya.

Malaysia and Brunei, which produce crude oil and refined products, could increase production but only to a certain degree, Coyne said.

In March the government committed to underwriting a portion of fuel purchases by refiners and suppliers.

Read more:

• Cyclone disrupts production at Australia’s biggest LNG plants, straining global supply
• New Zealand permits fuel imports meeting Australian standards amid supply shock

Tags

Australia energy crisis Fuel Politics News oil refinery Melbourne Geelong oil refinery