BP to Cease Production at Kwinana Refinery and Convert to Fuel Import Terminal

bp Australia today announced that it will cease fuel production at its Kwinana Refinery and ‎convert it to an import terminal, helping to ensure ongoing security of fuel supply for Western ‎Australia.

The refinery, near Fremantle, has provided fuels for Western Australia for 65 years. However, ‎the continued growth of large-scale, export-oriented refineries throughout Asia and the Middle ‎East has structurally changed the Australian market. ‎

Regional oversupply and sustained low refining margins mean the Kwinana Refinery is no ‎longer economically viable. Having explored multiple possibilities for the refinery’s future, bp ‎has concluded that conversion to an import terminal is the best option.‎

bp Australia head of country Frédéric Baudry said: “bp’s Kwinana Refinery has played an ‎important role in the development of Western Australia. It helped underpin the early ‎development of the surrounding community and key industries. Generations of Western ‎Australians have worked at the facility, building a fantastic legacy of safe and reliable ‎operations that we will always be proud of.‎

“Today’s 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.”‎

The refinery currently employs around 650 people – 400 permanent staff and 250 contractors. ‎Refining activities will wind down over the next six months, with a conversion workforce ‎supporting site works. The new terminal will support construction work out to 2022. Once ‎complete, the import terminal is expected to support around 60 jobs.‎

‎“bp is committed to playing a leading role in growing Australia’s future prosperity, making ‎significant investments in natural gas production, as well as in convenience and mobility ‎businesses,” Baudry said.‎

This includes building on its position in the North West Shelf joint venture through gas ‎exploration at Ironbark and investing in retail growth, as well as progressing low carbon ‎projects with Lightsource bp. It is also assessing the feasibility of a large-scale hydrogen ‎export plant in Geraldton (WA) in partnership with the Federal Government.‎

‎“We are particularly excited by the shared ambitions with Western Australia to be net zero by ‎‎2050 and the opportunities this can offer,” Baudry added.‎

In addition to investing in an import terminal at Kwinana, bp is also exploring future options for ‎the site including a potential clean energy hub to harness the existing and emerging ‎technologies required for the decarbonization of the Western Australian economy. A multiuse ‎clean energy hub could produce and store lower carbon fuels, including sustainable aviation ‎and marine fuels and waste-to-energy solutions such as renewable diesel.‎

bp has advised both the State and Federal governments of its decision and appreciates their ‎efforts to support the industry in Australia. ‎

Source: BP
Date: Nov 2, 2020