Defence contract onshores fuel refining

The federal government has moved to utilise defence contracts to support Australia’s oil refining industry through a new, onshoring domestic oil refining contract.

The Australian company Viva Energy Refining has been awarded a $450 million per year contract, subject to market fluctuations, for an initial six years which may be extended to 12 years.

The contract includes the supply of the Specialist Military Aviation Fuel for Navy helicopters, known as F44, and could be worth an estimated $2.7 billion over six years.

This fuel will be produced at the Viva Energy refinery in Geelong, Victoria, one of two remaining oil refineries in Australia, where around 1,000 people are employed.

Defence currently imports this specialist fuel and it has not been produced in Australia since 2013.

Viva retails Shell fuels nationally as well as operating the Geelong refinery.

Minister for Defence Industry Pat Conroy said: “The Albanese Government is proud to be supporting Australian industry and jobs rather than importing Specialist Military Aviation Fuel.”

“Coming after years of declining local oil refining and fuel production, this will be good for Australia’s defence, good for Australia’s energy security and good for Australian jobs.”

According to a statement from Conroy, by awarding this contract to an Australian company the government is increasing Australia’s refining capability and reducing reliance on imported fuels.

This secures a reliable fuel supply for Defence, critical to national security, and is consistent with the Government’s response to the Defence Strategic Review, which highlighted fuel supply vulnerabilities and the need for resilient national fuel supply, distribution and storage.

“We are really pleased about the difference this will make in the regional centre of Geelong in Victoria.

“The Government is working hard to build a resilient fuel supply for Defence and to strengthen Australia’s national security – and this domestic fuel supply contract will contribute to this.”

Picture: Defence/Jarryd Capper/HMAS Anzac’s flight deck team counduct a night helicopter in flight refuel