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Geelong Advertiser: SHELL SHOCK: Indecision puts water plant in limbo

Kerri-Ann Hobbs
Wednesday, 16 May 2007

SHELL’S refusal to commit to its Geelong refinery outside a year could torpedo its bid to grab $20 million for a water recycling plant. The gaffe also casts doubts on the security of Geelong’s water supply.

And the global oil giant’s reluctance to secure the future of the Geelong refinery could cost hundreds of jobs in associated industries and force up fuel costs  because the nearest processing plant was near Sydney, unions warned.

“This project only happens if Shell commits,” ALP Corio federal candidate Richard Marles told the Geelong Advertiser. “This funding is contingent based on Shell contributing a significant amount to it. “It’s a very important project because it’s the first significant water project we have had in Geelong.”

The recycling plant would ensure the region had ample drinking water during drought and was vital to ensuring the area’s growth, Mr Marles said.

The Bracks Government pledged $20 million to the project, with Shell to make up the remainder of the $64 million bill for the recycling plant.

Shell uses 5 per cent of the  region’s water but the recycling plant would almost end the refinery’s reliance on mains water.

Shell Australia chairman Russell Caplan last week told the  Herald Sun  the company would stay in Geelong for the next year.

But after that the company had to decide whether to spend hundreds of millions of dollars upgrading the ageing Corio plant or move its operations off-shore to modern super-plants in India or Singapore, Mr Caplan said.

A company spokeswoman said Shell had invested millions in Geelong and its future was reliant on global trends but there was no immediate plan to close the refinery.

Federal Water Minister Malcolm Turnbull said the cash, if granted, would go to a partnership involving the Victorian Government, Barwon Water, Shell Australia and the Australian Government.

“The project was nominated by the Victorian Government for Australian Government funding as an `icon’ project,” Mr Turnbull said.

“The grant proposal is still under consideration and as such it would be premature to comment further.”

Trades Hall’s Tim Gooden said closing the Geelong plant would affect other industries, lead to higher fuel prices in the bush and be a huge blow to the city’s economy.

Geelong Mayor Bruce Harwood said he was confident of Shell’s continued involvement in the region.

The Geelong plant produces almost half Victoria’s fuel supply _ sold through Coles Express outlets _ but stopped manufacturing base oil because it was too costly to produce in the region.

In 2006, Shell earned $398 million in Australia, mainly from its oil and gas assets.

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