Albanese sounds alarm over closure of BP’s Kwinana refinery, urges government to take action

Summary

• Federal Labor leader Anthony Albanese urges the Morison government to avert the closure of the refinery.
• BP Australia has notified the market about its plan to cease the fuel production at the Kwinana refinery over commercial and international cues.
• Mr Albanese stated that the current closure would leave only three oil refineries across the continent, untenable for the commitment.
• Mr Albanese also mentioned that the closure would bring the fuel security of the west coast into jeopardy.

Federal Labor leader Anthony Albanese has called on the Morrison government to stop the closure of Kwinana refinery – operated and owned by the global oil & gas behemoth BP, in Western Australia.

BP Announces the Closure of Kwinana Refinery

BP Australia notified the market about its plan to cease the fuel production at the Kwinana refinery on 30 October 2020, for converting it into an import terminal.

The Kwinana refinery has been providing fuels for WA for 65 years; however, the continuous growth of large-scale, export-oriented refineries throughout Asia and the Middle East has brought a paradigm shift in the Australian market.

The Company stated that the turning landscape of regional supply glut and low refining margins had impacted the economic viability of the refinery.

The changing landscape of the domestic oil space prompted the oil & gas major to consider multiple possibilities for the refinery and post a thorough consideration, the Company decided that the best option for the refinery was to function as an import terminal.

As per the Company, the conversion of the refinery into an import terminal would help in ensuring the ongoing security of fuel supply across WA.

Job Losses to Follow

At present, the Kwinana refinery employs nearly 400 permanent and 250 contractors, which will now be reduced to just 60.

The Company will wind down the refining work over the next six months, and the new terminal construction will work out till 2022.

Citing that the decision to shutter the refinery was not in any way a result of local policy settings, the oil giant mentioned that the move was based on commercial and international cues.

While the new import terminal construction is anticipated, Mr Albanese mentioned to the reporters that the closure would jeopardise the fuel security of the west coast.

Mr Albanese stated that the current closure would leave only three oil refineries across the continent, untenable for the commitment. 

Mr Albanese added that the west coast is very important as an export hub for Australia.

BP To Stay Invested in Natural Gas and Future Prosperity of the Continent

While the Company decided to close the refinery, Frédéric Baudry, BP Australia head, suggested in the official announcement that the oil giant will make considerable investments in natural gas production.

Apart from that, Mr Baudry suggested that BP will continue playing a leading role in the future prosperity of the continent and build on its position in the NWS joint venture through gas exploration at Ironbark and investing in retail growth.