Mining boom will only exacerbate South Australia's chronic undersupply of fuel says SAFC
By Rob McKay | July 15, 2011
Caltex has agreed key terms for a 25-year deal with independent bulk liquids storage firm Terminals Pty Ltd for a near doubling of its fuel storage capacity in South Australia.
The move will help address will not solve the potential risk to transport fuel supply that the state has borne since the 2003 closure of the Port Stanvac refinery, south of Adelaide, South Australian Freight Council Chief Executive Neil Murphy says.
While welcoming the move as a modest but valuable step towards dealing with potential shortfalls, Murphy underlined that Adelaide usually has five day’s fuel supply but that can be squeezed during peak demand in the state, at harvest and seeding times.
“If fuel’s not on the water today … then we run out of fuel – that’s how parlous it is,” he says.
Murphy was sure the state’s building resources boom contributed to Caltex’s thinking about the Terminals deal but was unsure if it was the driving force.
However, he does believe that growing mining will drive demand for import and storage facilities across the state.
The deal represents the largest and latest in a series of commitments that Caltex has made to its supply chain, according to Caltex Australia Managing Director Julian Segal.
“This is a demonstration of our commitment to ensuring greater fuel supply reliability for Adelaide and supply continuity for Caltex’s growing list of commercial customers across the state,” Mr Segal says.
“This project is part of Caltex’s overall commitment to develop infrastructure and capability to meet Australia’s growing transport, agricultural and mining fuel needs.”
As part of the arrangements, Caltex will become a foundation customer of the new fuel storage terminal being built at Adelaide’s Outer Harbor.
Terminals Pty Ltd is awaiting formal approval of a Development Application for stage one of the terminal, which will hold unleaded grades 91, 95 and 98 as well as diesel, biodiesel and ethanol.
Caltex National Distribution Manager Mike Raleigh says that the construction of the new facility was due to begin later this year, subject to regulatory approvals.
The $80 million first stage of the new facility is scheduled to open in 2013 and will initially provide 85 million litres of new storage capacity for South Australian fuel supply and have capability to eventually expand to 135 million litres.
“Caltex’s current fuel capacity in Adelaide is limited by available tank capacity and by congestion at the existing Inner Harbour berth due to occupancy levels rapidly approaching their upper limits,” Raleigh says.
“These capacity constraints have been a major factor in a number of fuel shortages affecting Adelaide and the state of South Australia over the past few years.
“Moving to a new terminal, which will be serviced by a new Outer Harbor berth, will give South Australians much greater fuel supply certainty and also improve safety.”
Caltex Lubricants & Direct Sales National Manager Phil Amos says the expansion of fuel storage capacity would benefit the state’s mining industry, which needs increased volumes of diesel as it continues a rapid expansion over the next decade.
“Caltex has seen a continued growth in its national marketing business, driven in part by increased sales of transport fuels which grew to 15.1 billion litres in 2010,” Amos says.
“Our increased commitment to fuel supply infrastructure in Adelaide follows an expansion in our storage capacity in Western Australia and Queensland, where we are servicing the rapid growth in the mining sector.”