BP will stop fuel production at its Kwinana Refinery in Western Australia and convert it to an import terminal, as the refinery had become uneconomical.
BP said that regional oversupply, along with sustained low refining margins have resulted in the refinery no longer being economically viable. Kwinana is the largest oil refinery in Australia, with a capacity of 146,000 bbl/d, and the only refinery in Western Australia.
The refinery currently employs around 650 people and once it is converted to an import terminal it is expected to employ around 60 people. Refining will be wound down in the next six months and the conversion is expected to be completed in 2022. BP is also exploring additional options for the site, such as a clean energy hub that could produce and store low carbon fuels. This could include sustainable aviation fuels and renewable diesel.
BP Australia Head of Country Frédéric Baudry said: “[This] decision to cease refining is a difficult one and not in any way a result of local policy settings. It comes in response to the long-term structural changes to the regional fuels market. Converting to an import terminal will not impact the safe and reliable supply of quality fuel products to Western Australia; however, it will require fewer people to run. We deeply regret the job losses that will result and will do everything we can to support our people through the transition.”
A statement from Angus Taylor, Minister for Energy and Emissions Reduction, said that the Australian Government is “deeply disappointed” with the decision and that is expects BP to hold to its commitment to support workers and the community.
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