er c en t 0 5 10 15 20 25 30
Vietnam Malaysia Indonesia United Arab
Emirates Papua NewGuinea Brunei Saudi Arabia Singapore Other
Source: Australian Petroleum Statistics, Department of Industry, Tourism and Resources.
3.3
Imports and exports
3.3.1 importers
All of the refiner-marketers import petrol into Australia. There are also independent importers who import petrol for wholesale within Australia from time to time. These independent importers include Trafigura in Victoria, Gull in Western Australia, and Neumann in Queensland. However, they only import small volumes and source most of their product from the refiner-marketers in Australia.
Mobil submitted that it is currently the largest importer of petroleum fuel into Australia, and is a net supplier of fuel to the industry (both to other refiner-marketers and independent operators). The primary destinations for Mobil’s imports are the markets in South Australia and Western Australia, but some is supplied to Sydney and Melbourne. Mobil sources fuel that is compliant with the Australian standards from the ExxonMobil Asia Pacific P/L refinery in Singapore.26
Shell sources its imports from either the Shell refinery in Singapore (Bukom) or third parties in Korea, Taiwan and the Middle East. Shell’s imports are all sourced through Shell Trading International Eastern Company in Singapore.27 In 2006, 44 per cent of Shell’s imports of unleaded petrol came from third
parties.
BP has an open supply arrangement with several regional refiners, for example, Chevron in South Korea.28
26 Mobil submission, p. 4.
27 ACCC, public hearing transcript, Melbourne, 13 September 2007, pp. 18–9. 28 ACCC, public hearing transcript, Melbourne, 5 September 2007, p. 10.
Caltex is also a significant importer of petrol. Caltex submitted that it had been importing fuel compliant with the new national fuel standards from Korea, Singapore and Taiwan since January 2006.29
Trafigura imports into the Hastings terminal in Victoria. However, it only does so every three to four months. It is no longer a significant importer. The Hastings terminal was offered for sale in 2006 through an expression-of-interest process, open to all interested parties.30
Neumann Petroleum indicated that while it had imported cargoes of unleaded petrol before the changes in the Australian fuel standards, the change in the standards increased its cost of importing. Neumann Petroleum stated that it was unable to compete by directly importing because it had to import a more expensive higher octane product compared with the local market and therefore it now sources petrol from local refineries. While it noted that the price of importing petrol was not currently attractive, it considered that it would be able to source supplies of fuel from Korea, and possibly Japan, consistent with the Australian fuel standards if the price became attractive in the future.31
Gull currently imports some cargoes of unleaded petrol compliant with the Australian standards into its terminal facility at Kwinana in Western Australia.
3.3.2 terminals
Terminals are large storage facilities where vehicles gain access to supplies for distribution to distributors, retailers and end users. They are commonly located near sources of supply such as ports and refineries.
The majority of terminals capable of receiving import cargoes are owned and operated by the refiner- marketers. There are also import terminals owned or leased by independent importers (such as Neumann and Trafigura) and terminals operated by independent liquid bulk logistics companies (such as Coogee Chemicals, Marstel, Terminals West and Vopak). The independent bulk logistics companies provide storage to both the refiner-marketers and to independent importers.
In addition to owning and operating their own terminals and leasing capacity at terminal owned and operated by a bulk logistics company, the refiner-marketers access each others’ terminal facilities through hosting arrangements, joint venture arrangements or through ‘borrow and loan’.
A hosting arrangement allows for a guest to store product and have it loaded onto a tanker at the host’s terminal. Hosting arrangements can either be on a ‘spot’ or a ‘term’ basis, but are typically used to cover short periods of product shortage or during maintenance periods.32 BP noted that the provision of
hosting services has allowed the industry to reduce duplication of infrastructure, and so reduce costs.33
Under a joint venture arrangement, a number of companies have equity interests in a terminal. One of the equity holders takes on responsibility for operation of that terminal on behalf of the joint venture. For example, Caltex and Mobil have a joint terminal arrangement at the Gladstone terminal in Queensland under which Caltex operates the terminal.34 The inquiry heard evidence that generally
joint terminals are set up with the intention of sharing tankage and typically there is no stipulation of reserved capacities for either party.
Participants in borrow and loan arrangements each own and or operate a number of terminals around
29 Caltex submission, p. 25. 30 Caltex submission, p. 36.
31 ACCC, public hearing transcript, Brisbane, 22 August 2007, p. 11. 32 Additional material provided by Caltex, 19 October 2007. 33 BP submission, p. 18.
Australia. Under borrow and loan, the host:
(a) receives and stores products for the guest at each host terminal in accordance with the borrow and loan agreement and
(b) returns the products back to the guest at each host terminal in accordance with the borrow and loan agreement.35