BP will close its 146,000 bbl/d Kwinana refinery in Australia

BP Australia will stop its 146,000 bbl/d Kwinana refinery, near Fremantle (Western Australia), and will convert it to an import terminal, citing the competition from large-scale, export-oriented refineries throughout Asia and the Middle East. Refining activities will wind down over the next six months and the new terminal is expected to be operational in 2022. BP is also exploring future options for the site including a multiuse clean energy hub, which would produce and store lower carbon fuels, including sustainable aviation and marine fuels and waste-to-energy solutions such as renewable diesel.

There are four refiners in Australia: BP (Kwinana refinery, 146 kb/d), Vitol (Geelong refinery; 128 kb/d), Ampol (Lytton refinery; 109 kb/d), and ExxonMobil (Altona refinery; 90 kb/d). In September 2020, Australian oil company Viva Energy (Vitol) announced that it could close its 128,000 bbl/d Geelong refinery in Victoria, due to the fall in petroleum products demand. In October 2020, Ampol (formerly Caltex) announced that it was considering closing its 109,000 bbl/d Lytton refinery due to the depressed market.

In September 2020, the government unveiled a plan to invest AUD211m (US$154m) to increase domestic fuel storage capacities by building an additional 780 megalitres of onshore diesel storage. It will also introduce a minimum stockholding obligation of 24 days for petrol and jet fuel stocks (28 days for diesel) and will subsidise local refineries to keep them open, in order to secure its long-term fuel supply as the coronavirus-driven demand fall threatens to close refining capacities. In addition, the authorities will introduce a production payment system to protect consumers against fuel price increase.