Australian fuel supplier Viva Energy Group <VEA.AX> on Monday said it will shut down a unit of its Geelong Refinery in Victoria as it seeks to reduce surplus production to cope with a collapse in fuel demand because of the coronavirus pandemic.
Viva and other Australian refiners have been hit hard by plunging demand for transport fuels such as gasoline and jet fuel as measures to contain the viral outbreak have disrupted travel, businesses and industries.
Last month, the company slashed its capital expenditure forecast for the year and deferred a share buyback.
Viva said closure of the refinery's Residual Catalytic Cracking Unit and other associated processing units will not have a material financial impact or disrupt fuel supply.
The company's 120,000-barrels-per-day Geelong refinery is second largest among Australia's four refineries and supplies about 10% of the country's oil product needs.
"Taking into account the cost efficiencies that would flow from not operating the units, the incremental financial impact of this action is expected to be immaterial in the current refining margin environment," the company said.
Viva added the refinery's main crude distillation unit will continue to operate, while it expects refining intake to be reduced to about 2.5 million barrels per month.
(This story corrects typo in 2nd paragraph.)
(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Tom Hogue)
