Victorian-based oil refiner Viva Energy has given the go-ahead to a $300 million upgrade of its Geelong oil refinery to produce ultra-low-sulphur gasoline that will comply with new emissions limits and ensure the plant can continue operating.
The investment decision comes after the federal government confirmed ASX-listed Viva would receive $125 million grant, first announced in May last year, to contribute towards the works.
The Geelong refinery, which processes crude oil into transport fuels, is one of just two local oil refineries left in Australia after the closures of BP’s Kwinana plant and ExxonMobil’s Altona refinery in 2020-21. Ampol has earlier closed its big Sydney refinery and Shell had closed a smaller refinery in Sydney as well before it sold out to Viva, which is 34% controlled by the giant global oil trader, Vitol.
Viva chief executive Scott Wyatt said the company had committed to continue refining in Australia to mid-2028 and would support domestic fuel security.
“Our announcement today to substantially upgrade our refinery will improve the quality of petrol produced here in Australia, help reduce vehicle emissions, and improve processing flexibility,” Wyatt said.
“These investments and commitments support local jobs and substantially improve Australia’s energy security.”
Ampol’s Lytton refinery in Brisbane has also received a $125 million grant for similar work.
Viva also revealed that it was paying $15 million for LyondellBasell Australia (LBA), a Geelong-based national polymer manufacturer and distributor which has its production facility located inside the Geelong Refinery area.
“LBA is the country’s only polypropylene manufacturer, supplying the Australian and New Zealand market with raw material for the production of diverse plastic products ranging from food packaging and medical equipment to polymer bank notes, and serving more than 60 customers across Australia, New Zealand, Asia, India, the Middle East and North America.
“The business is strongly complementary to Viva Energy’s refining operations, with Geelong Refinery’s propylene production utilised as the feedstock in LBA’s manufacturing operations.”
“The initial purchase price is $15 million, subject to customary adjustments at completion, with an agreed earnout mechanism across a 6-year period, not to exceed a further $25 million. The transaction remains subject to regulatory approvals which are expected to progress in the coming months,” Viva said.
