02 Nov BP to close oil refinery in Western Australia, threatening domestic fuel supply
BP has revealed plans to stop producing fuel at its Kwinana oil refinery in Western Australia, instead converting the facility into a fuel import terminal, in response to strong competition from the Asian market.
The company said it would wind down operations at Kwinana – the biggest of Australia’s four oil refineries – over the next six months, putting 650 jobs on the line.
“Regional oversupply and sustained low refining margins mean the Kwinana refinery is no longer economically viable,” BP said in a statement.
The move could spell the end of Australia’s domestic oil refinery sector, with rivals Viva Energy and Ampol both considering shutting their refineries and also converting them to fuel import terminals.
The Australian government has made efforts to build up national fuel security with incentives of A$2.3 billion to the country’s four refiners to keep their refineries open.
BP added that its was also considering developing Kwinana as a clean energy hub to produce and store lower carbon fuels, such as renewable diesel produced from waste, as part of its long-term drive to become a clean energy producer.