(Adds comment, details, FID on gas import terminal project)...

(Adds comment, details, FID on gas import terminal project)

April 27 (Reuters) - Australian fuel supplier Viva Energy Group (VEA) said on Tuesday it expected to receive government aid of about A$19.6 million ($15.28 million) for the first quarter to keep its Geelong refinery running.

Viva is the only one among Australia's four refiners to take short-term government aid and is in talks on federal support to run its refinery beyond mid-2021 and boost its underlying refining earnings after the pandemic hit.

"Refining remains challenging, but production is strong, and we are continuing discussions with the Federal Government on the long-term Fuel Security Package," Viva said in a statement.

Refining margins at Geelong came in at $5.9 per barrel in the March quarter, in line with the November and December 2020 levels after the site returned to full production, but well below long-term averages, the company said.

Viva said it was on track to make a final investment decision in the first half of 2022 on its proposed gas import terminal, which it says is best placed in Victoria to help plug an expected supply gap in south-eastern states.

The project is not expected to run into the same level of opposition as a rival gas import terminal proposed by AGL Energy (AGL) , which the state government rejected in March due to concerns it would damage internationally recognised wetlands.

Total Viva group output for the three months ended March 31 fell to 3,030 million litres (ml) from 3,640 ml a year earlier, hurt by lockdowns and border restrictions. ($1 = 1.2825 Australian dollars)