Diesel fuel storage capacity at the Port of Newcastle is set to be dramatically expanded under the Federal Government’s push to secure Australia’s long-term fuel supplies by increasing domestic reserves to meet future supply chain disruptions and emergency needs.
The Government is awarding grants to two projects at Newcastle that will see current tankage capacity across the port’s three bulk fuel terminals grow from 266 megalitres to 624 megalitres.
The funding, which is specifically for the expansion of diesel facilities, will see two of the companies, Stolthaven and Park Fuels, expand their dedicated bulk-liquids facilities.
Stolthaven will gain an extra 126 megalitres of diesel and Park Fuels will gain an additional 30 megalitres of diesel.
Along with the additional diesel storage, the projects will also deliver 202 megalitres of additional petrol and jet fuel storage funded by the private sector.
The grants, which will cover up to 50 per cent of project expenditure, are part of the Government’s $260 million package to boost long-term fuel security across the nation.
Under the Boosting Australia’s Diesel Storage program, the Government is backing 10 projects across Australia that will see a 40 per cent increase in Australia’s diesel stockholdings.
“The $260 million is across the 10 national projects and there is no clarity at this point on what amount is for the Newcastle projects,” a spokesperson for the Port of Newcastle said.
Construction on the projects at Newcastle is expected to commence from mid-2021 and be completed within three years.
Oil stocks held in US
Meanwhile, the Australian Government has taken advantage of dramatic falls in global oil prices to purchase $94 million worth of crude oil to top up supplies.
But with no domestic storage capacity available, the extra fuel is being stored in underground caverns in the United States as part of an agreement with the US to hold the oil in its Strategic Petroleum Reserve (SPR).
Under the agreement, Australia can hold oil in the SPR as strategic reserve stocks for an initial period of 10 years. It takes 25 days to ship the fuel to Australia.