21 July 2023

Defence to increase fuel reserves by boosting domestically produced fuel

| Andrew McLaughlin
Start the conversation
Helicopter refuelling

A Royal Australian Navy MH-60R Romeo Seahawk is refuelled while hovering over the deck of a Navy warship. Photos: ADF.

Australian company Viva Energy Refining has been awarded a $450 million per year contract to provide domestically produced fuels for the Australian Defence Force.

The new six-year contract – announced by Defence Industry Minister Pat Conroy – will see the locally produced fuel replace foreign-sourced supplies, thus bolstering national fuel security for the ADF. Viva’s Geelong facility is one of only two oil refineries remaining on Australian soil.

The release specifically mentions F44 type fuel, a NATO designation for fuel designed specifically for aircraft gas turbine engines like those used by helicopters. While the release only names Navy helicopters – of which Australia has about 50 – the contract amount suggests the fuel will be used much more widely.

READ ALSO Defence sees in the new financial year with several key structural changes

When Region sought clarity from Defence on this, it confirmed that the contract is actually “for the supply of all fuel types to support the ADF”.

“Specialist military aviation fuel for Navy helicopters…is just one fuel type procured under the contract with Viva,” a Defence spokesperson said. “The values quoted apply to all fuels supplied, including specialist military aviation fuel, marine diesel, automotive diesel and petrol.”

The contract comes after April’s Defence Strategic Review (DSR) briefly highlighted Australia’s dangerously low and vulnerable fuel reserves, which some analysts had previously estimated to be less than 25 days of holdings. In the event of a regional conflict, Australia’s maritime trade supply lanes could be threatened, including fuel supplies, which have mainly come from Singapore.

Replenishment at Sea

The Royal Australian Navy’s HMAS Canberra conducts a replenishment at sea with HMAS Supply.

According to the Department of Climate Change, Energy, the Environment, and Water, as of April 2023, those estimates were correct or worse than the analysts had predicted, with Australia holding just 25 days of aviation turbine fuel in reserve, 21 days of diesel reserves, and 28 days of petrol.

It also states that, in the two years to the end of 2022, the refinery production of automotive gasoline in Australia dropped by 22.4 per cent, diesel by 19.6 per cent, and aviation turbine fuel by 15.2 per cent.

The previous government had established a series of grants to build additional fuel storage capacity in Australia through the $260 million Boosting Australia’s Diesel Storage Program. While the first tanks under the program are expected to be completed soon, industry sources indicate that only four of the nine grants offered were taken up and that the Labor Government is considering extending the grant qualification period to mid-2025.

Air-to-air fefuelling

A Royal Australian Air Force EA-18G Growler is refuelled in mid-air by a KC-30A MRTT during an exercise in the US.

In a release, Minister 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.”

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

Start the conversation

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.