“This is a setback:” Bowen says petrol production affected by ferocious fire at one of Australia’s two oil refineries

Federal energy minister Chris Bowen, says a “ferocious” fire at one of Australia’s two oil refineries is a setback, and will likely affect mostly production of petrol for cars, but not diesel, and aviation gasoline that is used mostly for small planes.

Bowen told a news conference that the petrol fuel is likely to be replaced by imports, but the situation cannot be fully assessed until damage at the Viva refinery is inspected. It is believed to have been caused by equipment failure, authorities have revealed, as the blaze continues to burn. 

“This is not a good development,” Bowen told journalists. “We don’t quite know how much petrol production will be impacted.”

Fire crews were dispatched to the site in Corio, southwest of Melbourne, about 11pm on Wednesday following reports of explosions and flames.

The Viva Energy Geelong refinery supplies more than half of Victoria’s fuel and about ten per cent nationwide, according to Viva’s website.

The fire comes amid a global fuel crisis. 

Viva Energy called a trading halt on its shares on the stock market, ahead of an update on the damage caused by the blaze.

Disruptions to petrol production are expected as a result of the fire, while production of other fuels is expected to slow in the immediate term. 

While investigators will probe the cause of the fire, Fire Rescue Victoria deputy commissioner Michelle Cowling said equipment failure was likely to blame.

“It looks like a valve has given way and has started a small leak,” Ms Cowling told ABC. 

“(It) obviously found an ignition source and ignited into a significant explosion.

The fire has been brought under control but continues to pose significant risks and may burn for hours more, Ms Cowling said shortly after 11am. 

It broke out at units responsible for the production of petrol, speciality regional products and aviation gasoline, which is distinct from jet fuel.

Petrol production has been disrupted but imports will be sufficient to cover any shortfalls, Viva Energy Australia’s chief executive Scott Wyatt said.

“We’ll only start increasing production again once we’re confident we can do that safely,” Mr Wyatt said. 

“To the extent we have shortfalls in production, just cover that with our import program, which is quite full for the next… couple of months.”

The Victorian government has been assured there is no immediate impact on fuel supply, state Energy Minister Lily D’Ambrosio said.

“There’s no cause for alarm,” she told ABC Radio.

“From indications thus far from Viva … they have in hand those additional shipments.”

Petrol is far more easy to import through the global market than diesel or jet fuel, she added. 

The refinery can produce more than 120,000 barrels of oil per day, manufacturing petrol, diesel, jet fuel, LPG, avgas and low aromatic fuel.

Along with Ampol’s Lytton Oil Refinery in Brisbane, the Geelong plant is one of two facilities capable of refining fuel domestically.

Both have been under the spotlight in recent weeks amid fuel security challenges related to conflict in the Middle East.

Energy Minister Chris Bowen said the fire came at an inopportune time given global supply constraints, but insisted production would not come to a grinding halt.  

“At this point, production of diesel and jet fuel continues and (there is) no reason to believe at this point that it will stop that,” he told the ABC on Thursday morning. 

“I’m sure that petrol production will continue, but it may be impacted for some time.”

Opposition Leader Angus Taylor said the fire would have a direct impact on the country’s fuel supply. 

“It was a horrific scenes we’ve seen today of the fire down at Geelong,” he told reporters at the Gold Coast on Thursday.

“I’m glad to hear that as far as I know, at least there’s been no safety issues there, but clearly there will be an impact on our fuel supply.”

About 50 firefighters, ten fire trucks and a boat attended the scene, Fire Rescue Victoria assistant chief fire officer Michael McGuinness told reporters.

“(It was) quite ferocious. The fire went from a small fire through several explosions to be quite a large, intense fire,” Mr McGuinness said.

There are no reported injuries and all employees and emergency responders have been accounted for.

Source: AAP