Danny Lannen, 17 February 2016

VIVA Energy is spending $350 million on Corio refinery upgrades with a new crude oil tank boosting storage capacity by 40 per cent among its predicted production “game changers”.

Refinery general manager Thys Heyns said $85 million in planned maintenance work was also powerful investment in the future of the plant as part of a mission to fully utilise production capacity and improve efficiencies.

He said staffing was part of efficiency reviews.

“With Viva taking over from Shell the challenge for us is to make sure that we can keep this site manufacturing sustainably into the future,” Mr Heyns said.

“Australia used to have eight refineries, we’re down to four and manufacturing in Australia is not easy because we typically lack the scale and we have a very high cost base.

“In thinking about how we are going to give effect to our commitment to sustainably manufacture here at the Geelong refinery we’ve looked at what needs to be done to improve that performance.”

Mr Heyns said assessments of staffing had begun.

“We’re working really hard on improving our employee engagement, driving accountability and performance of people,” he said. “We will continue to review to see where there are opportunities to be more efficient and that will probably mean we have a few job losses.

“The benchmarking suggests we ought to be able to do the job with an equivalent of about 100 people less — both contractors and Viva personnel — but we haven’t done the design.”

Mr Heyns said boosting crude storage capacity, which alone would cost up to $50 million, would slash the cost of keeping oil delivery ships waiting.

He said utilising capacity in refinery production lines would also be a key objective.

The 120ha plant is Australia’s only bitumen manufacturer but uses less than half of its capacity. Mr Heyns said production of aviation fuel was at half of capacity and prod­uction of hydrocarbon solvents was also below cap­acity.

Pipes to Viva terminals at Newport have been upgraded and a $1.5 million upgrade to a road tanker loading gantry has improved efficiency.

Mr Heyns said allocation of the new crude oil tank contract to NSW company New World Engineering Construction ahead of Brockman’s Engineering in Geelong had been judged across several criteria and on a competitive basis.

Upgrades on the southern section of the plant will involve full breaking down of equipment including the 50m high cat-cracking unit for inspection and maintenance.

Half of the refinery will still run while the maintenance is carried out by up to 700 extra contractors from Geelong and beyond.

Mr Heyns said the refinery processed 36 million barrels of crude oil a year with a turnover of about $1.5 billion.

Extracted in full from the Geelong Advertiser.