Altona closure fuels concerns about Australian manufacturing

Downstream producers would likely ‘source feedstock from China’

EXXONMOBIL is closing its Altona refinery in Victoria, Australia. The decision comes hot on the heels of BP’s plans to shut the Kwinana refinery and has elevated concerns about fuel security and the future of downstream manufacturing in Australia.

The US major said its Altona refinery, which began operations in 1949 and employs around 300 staff, is no longer economically viable and will be converted into an import terminal. BP made the same decision in October for its Kwinana refinery in Western Australia. Together they bring the number of refineries closed in Australia to four since 2012 and will leave the country with just two operating facilities.

Covid-19 and the resulting drop in travel has severely disrupted fuel demand and refinery operating models, heightening long-running concerns about fuel security in Australia. In December, the Federal Government introduced a package of measures to prop up the sector, protect jobs and secure supplies. Australia currently imports around 90% of its liquid fuels.

Angus Taylor, Minister for Energy and Emissions Reduction, said ExxonMobil’s decision is extremely disappointing. And further disappointment could follow. Of the two remaining refinery owners, only Viva Energy, which runs the Geelong site in Victoria, has accepted the Government’s support package. Ampol, the owner of the Lytton plant in Brisbane, is still reviewing it.

Concerns have been raised about the closure’s impact on downstream manufacturers, including the local Altona chemicals industries. Tim Watts, an MP of the opposition Labor Party, took to Twitter to ask: “How many jobs will be lost now in chemical manufacturing?”

Tim Kennedy, National Secretary of the United Workers Union, told The Age that local plastics producers would likely have to source feedstocks from China.