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Newcastle BP Terminal launch and release of Oilcode Review and Import Terminal Audit: speech, NSW.

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Minister for Resources and Energy, Minister for Tourism

Newcastle BP Terminal Launch and Release of Oilcode Review and Import Terminal Audit

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Good morning ladies and gentlemen.

It is with great pleasure that I am here in Newcastle to launch the newly revamped BP Terminal.

The Australian Government is absolutely committed to reinvigorating Australia’s port and rail networks.

Because investing in the infrastructure is vital to Australia's long term prosperity.

And because investing in infrastructure creates jobs at a time when they are most needed, and just as important, boosts productivity in the longer term.

I welcome BP’s investment of over $40 million in this terminal and the Newcastle region, and I wish them every success in the terminal’s operation.

The changes to the terminal mean that Newcastle can receive direct fuel shipments from the BP refineries in Brisbane and Perth, supplementing the supplies pipelined from refineries in Sydney.

As a result of this investment this facility can now store in excess of 55 million litres, meaning improved security of supply of liquid fuels for people in the Newcastle region.

The project includes a new berth and wharf-line.

There were a total of 12 companies involved in construction, which created 120 jobs.

Newcastle Port Corporation was also very helpful in facilitating this important investment.

The Government will continue to work closely with industry to ensure we have cost competitive and reliable access to fuel at both consumer and industry level.

In this regard, I’m pleased to announce the release of the Oilcode Review.

The Oilcode was established under the Trade Practices Act.

Its objectives include:

RET Minister > The Hon Martin Ferguson AM MP

The Hon Martin Ferguson AM MP

24 Aug 2009

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· establishing standard contractual terms and conditions for wholesale supplier-fuel retailer re-selling agreements,

· introducing a nationally consistent approach to terminal gate pricing and improving transparency in wholesale pricing,

· establishing an independent, downstream petroleum Dispute Resolution Scheme

The Review found the Oilcode is working as it was originally intended.

However, the Oilcode Review acknowledges that some improvements can be made.

It makes 11 recommendations to improve protections for small businesses and the effectiveness of the Dispute Resolution Scheme.

In particular, the Oilcode Review has recommended:

· Further disclosure by suppliers before entering into petroleum reselling agreements

· Greater clarity and certainty in relation to Dispute Resolution Scheme processes

· Government and industry should identify and address barriers to the use of collective bargaining provisions under the Trade Practices Act.

The Australian Government will carefully consider the Review’s recommendations and consult with interested parties before making decisions.

I am also pleased to release the Petroleum Import Infrastructure in Australia report prepared by ACIL Tasman.

This report followed the ACCC’s recommendation that the Australian Government commission a comprehensive audit of the capacity of Australia’s existing infrastructure to meet current and future crude oil and petroleum product import requirements.

The Import Terminal Audit concludes that existing infrastructure and planned investments will mean spare capacity emerging in all jurisdictions except the Northern Territory over the next two years.

That’s good news for the industry, and the upgrade to this BP terminal is an example of these key investments.

And it’s good news for consumers too. Fewer bottlenecks mean better access to petroleum products.

In general, the audit found that the current operating environment and access arrangements for import terminals do not impose material barriers or constraints on competition for importers.

However, the audit has also recommended:

· A review of the costs and benefits of retaining different fuel standards in Western Australia

· A review of planning and approvals processes to ensure efficiency and consistency across jurisdictions

· That consideration be given to measures for ensuring that the Australian Government’s

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statistics collection captures all petroleum imports, relevant stock level indicators and storage capacity at all import facilities.

While it is comforting to know that we will be able to meet future import demand, the Government will now consider whether adopting the audit’s recommendations will bring additional benefits.

I’m grateful to all those who worked on these two important reviews of Australia’s existing fuel policy and infrastructure.

These reviews are timely. They will inform the Energy White Paper process, and the Government’s consideration of longer term supply and demand issues.

The Australian Government is committed to maintaining Australia’s fuel security and to giving consumers access to a fair and equitable market for fuel products.

I once again congratulate BP on their achievement here in Newcastle and thank you for the opportunity to be here today.

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