Viva Energy ponders burning LPG reserves
Viva Energy, the Australian energy giant, has revealed it may have to burn LPG rather than sell it – because of rising prices.
Viva, which acquired the refinery and hundreds of service stations from Shell in 2014, is a big consumer of gas and faces the cost doubling when its supply contract expires later this year, according to Financial Review.
Chief executive, Scott Wyatt, told the Financial Review: “We are planning and expecting our energy cost to go from $50 million a year to $100 million per year over the next 12 months and that is a massive impost to our business in that time. To put it in context, an increase like that will essentially increase our operating cost by about 20 per cent.”
Wyatt added: “”As part of our refining process we make gas, we make LPG, and at some point as gas prices increase it will be cheaper to burn LPG within Geelong than it will be to buy natural gas from the market, it is not particularly creative, but that is a tipping point in terms of our gas consumption.”