Meeting Demand: The Future of Oil Distribution Infrastructure in Australia
Australia’s fuel supply chains are undergoing major changes to align with energy transition goals and new consumption patterns. While electrification will disrupt gasoline demand, projections show continued reliance on diesel and aviation fuels over the next two decades. Renewable diesel, hydrogen and biofuels are also expected to gain share.
To remain competitive, oil distributors have to adapt distribution infrastructure for an evolving product mix. Storage terminals, pipelines and tanker fleets require strategic expansion and retrofitting. Here is how leading industry players are future-proofing assets to meet Australia’s fuel needs through 2050 and beyond:
Investing in Low-Carbon Liquid Fuel Infrastructure
As petrol cars decline, storage infrastructure has to shift towards mass movement of lower-emission diesel and biofuels. Viva Energy is repurposing four terminals to handle renewable diesel made from waste oils and biomass. It is also installing ethanol storage tanks across depots to support bio-blends.
Meanwhile, Ampol is acquiring two new terminals and a pipeline to boost diesel and jet fuel supply in remote regions where mining and air travel demand is surging. Since long-term asset investments are capital-intensive, placement decisions have to account for geographic demand changes.
Building Out Multi-Product Capability
With growing fuel diversification, infrastructure flexibility to handle both fossil fuels and biofuels is crucial. Puma Energy is installing multi-product pipelines that can transport ethanol, LPG, and jet fuel instead of just petrol or diesel. Storage tanks are being retrofitted to switch between various liquid fuels using removable liners.
BP Australia aims for its depots and tanker trucks to be compatible with at least three fuel types by 2030. This includes synthetic fuels using hydrogen or biowaste feedstock. Asset versatility allows distributors to adjust capacity across supply channels and respond faster to policy shifts or demand fluctuations.
Scaling Up Hydrogen Refuelling Infrastructure
Hydrogen fuel cell vehicles are expected to gain prominence by 2030. To enable adoption, refuelling stations have to come online nationwide. Caltex plans to open H2 stations at 30 retail sites by 2026. Production hubs co-located onsite will extract hydrogen through electrolysis.
Viva Energy is retrofitting pipelines from its Geelong refinery to transport hydrogen to Melbourne and Sydney where early H2 vehicle uptake is highest. Blending green hydrogen with natural gas supplies is also being evaluated to lower end emissions. Such moves will help develop a holistic ecosystem for hydrogen mobility.
Building Electric Charging Corridors
As battery-powered EVs gain share, lack of charging access remains a barrier. Oil companies are leveraging their vast retail footprint to install highway fast-charging stations.
Ampol aims to have chargers every 100-200 kms along major interstate routes by 2030. It is setting up solar-powered electric oases offering food amenities alongside each charging stop. BP Australia too plans charger networks at over 800 retail sites. Blending gas pumps with EV charging makes retail properties multi-fuel destinations. It also provides a revenue stream beyond liquid fuels.
Boosting Supply Chain Digitization
Sensors, automation, AI and blockchain solutions will be indispensable to efficiently track and manage emerging fuel streams. Puma Energy is running a pilot to monitor hydrogen quality parameters using IoT sensors. All new infrastructure is being installed with remote instrumentation to enable real-time system visibility and prevent losses.
Viva Energy’s Geelong renewable fuels complex will be fully automated using AI to balance variable supply and demand. Digital integration allows predictive maintenance, inventory optimization and rapid adaptation across assets. Future-ready infrastructure needs built-in smarts and flexibility.
Partnering on Infrastructure Projects
Major infrastructure upgrades require extensive capital outlay. Collaborations allow oil companies to share costs and risks of large investments.
Joint ventures on storage terminals are emerging. BP Australia and Puma Energy are co-developing a new aviation fuel depot at Sydney Airport to share supply. Partnering gives access to infrastructure in strategic hubs without full ownership burden.
Companies are also teaming up with industrial groups on demand centres. Caltex is working with mining firm Fortescue to build an LNG and hydrogen facility at an iron ore site to fuel their vehicle fleet. resources firms provide guaranteed offtake for fuels distributed through shared channels.
Cross-industry partnerships create synergies for distributed infrastructure that serves both partner needs. Governments also favour collaborations that align with regional development goals, hence providing regulatory support.
Pooling resources through strategic alliances will facilitate infrastructure growth and energy diversification. However, collaborations need structured frameworks to ensure smooth functioning between different corporate cultures.
Adopting Circular Design Principles
Sustainability will be a key pillar of future infrastructure. Depots are being designed with solar rooftops, renewable power purchase and smart water recycling.
Companies also plan to use recyclable or low-carbon construction materials for new projects. Puma Energy’s 2050 net zero roadmap envisages fully circular terminals that recover and upcycle used hydrocarbons.
Waste CO2 from refining will be captured and converted into synthetic fuel stocks. Old storage tanks and pipelines will be dismantled and repurposed instead of scrapping.
Circular principles will be ingrained into asset design and development processes. Infrastructure with closed-loop material flows results in significant carbon savings over the operational lifecycle. It also enhances public goodwill and regulatory support.
Leading distributors recognize that a circular, shared, and smart infrastructure vision is key to align with Australia’s low-emissions future. Renewable fuels will depend on the backbone provided by these future-ready investments planned today.
In summary, significant investment in expanding storage and distribution with multi-fuel capability is vital for oil companies to satisfy Australia’s changing energy needs. An adaptive infrastructure strategy supplemented by retail site upgrades can help secure their role in a decarbonizing landscape.