ExxonMobil said its 90,000 b/d Altona refinery in Victoria is operating at a loss because of the impact of theCovid-19 pandemic on fuel demand in the Australian state, which has just emerged from a lengthy lockdown.
Australia's three other refineries are either converting to an oil product import terminal or are considering this option. BP on 30 October said it was converting its 146,000 b/d Kwinana refinery in Western Australia to an import terminal.
Australia's federal government unveiled plans in September to subsidise Australian refineries with Australian taxpayers to pay A1.15¢/litre of refined product produced in the country to help subsidise the refiners' costs for upgrades. These are required to meet the lower sulphur limits of 10ppm (0.001pc) from 2027 and replace the current upper limits of 150ppm, bringing Australia in line with Europe, the US and China.
Canberra also plans to issue A$200mn ($143mn) of grants to domestic refiners and downstream firms to build 780mn litres (4.9mn bl) of diesel storage as part of efforts to meet its IEA strategic reserve commitment and boost fuel security.
ExxonMobil welcomes the federal government's fuel security package, which is an "important first step in support for the industry", ExxonMobil said today. "However the proposed six-month consultation timeframe is too long given the near-term challenges faced by all refineries and we are working closely with the Australian Institute of Petroleum and the federal government to implement the first part of the fuel security package by January 2021."
ExxonMobil is also considering the sale of its 50pc stake in the Gippsland basin joint venture, offshore Victoria, where crude extracted is refined at Altona.
The government's financial assistance proposals for the refining sector was not enough to avert the closure of Kwinana.
"The support offered by the federal government was appreciated but it couldn't offset the considerable losses at the plant, which are the result of the long-term structural changes to the regional fuels market," BP said.
| Australia refineries | ||||
| Operator | State | Capacity '000 b/d | Status | |
| Westernport | BP | Victoria | 34,000 | closed 1984 |
| Matraville | Total | New South Wales (NSW) | 45,000 | closed 1985 |
| Port Stanvac | ExxonMobil | South Australia | 100,000 | mothballed 2003, demolished 2012 |
| Clyde | Shell | NSW | 100,000 | converted to import terminal 2012 |
| Kurnell | Caltex | NSW | 135,000 | converted to import terminal 2014 |
| Bulwer Island | BP | Queensland | 102,000 | converted to import terminal 2015 |
| Total closed | 516,000 | |||
| Geelong | Viva Energy | Victoria | 128,000 | considering viability |
| Lytton | Ampol | Queensland | 109,000 | considering viability |
| Altona | ExxonMobil | Victoria | 90,000 | operational |
| Kwinana | BP | Western Australia | 146,000 | converting to import terminal |
| Total operational | 473,000 |
