Viva Energy projects massive loss after Geelong Refinery construction incident
Viva Energy has projected major losses after an incident at its flagship Geelong Refinery.
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Viva Energy could lose up to $105m in refining revenue after a compressor was dropped from a crane at its Geelong Refinery at Corio.
In an ASX release, Viva Energy Group said a “contractor crane failure” occurred on Tuesday, causing a compressor to be dropped to the ground.
The compressor was being installed as part of planned maintenance.
“The area was subject to an exclusion zone at the time and no one was injured,” the statement read.
“WorkSafe has been notified and Viva Energy has launched an investigation into the cause of the incident.
“The compressor was being installed as part of the major maintenance turnaround currently underway at the refinery.”
According to the statement the extent of damage to the compressor has not yet been determined, but repairs are expected to take three months to complete.
“During this period the company anticipates a Refining EBITDA (RC) loss in the range of AUD$25m to $A35m per month (including in June) due to production and margin impacts,” the statement read.
“The company has insurance coverage for property damage and business interruption, which we expect will materially reduce the extent of this anticipated financial impact.”
The company said the maintenance turnaround was expected to finish by the end of this month, which would allow the unaffected units to restart.
“We do not expect supply to the market to be disrupted as a result of the incident,” the statement read.
A spokesman for Climate Change Miniser Chris Bowen said Viva informed the government of its response to the incident.
“The government is monitoring the situation but does not expect disruptions to supply or price,” the spokesman said.
Viva Energy’s share prices dipped slightly before close on Tuesday, from $3.23 to $3.20, and dropped further to $3 on Thursday afternoon.
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Originally published as Viva Energy projects massive loss after Geelong Refinery construction incident
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