BP intends to halt refining operations at its 102,000 bpd Bulwer Island refinery in Brisbane, Queensland, by mid-2015, the company said on Tuesday.
Andy Holmes, President of BP Australasia, said that the growth of very large refineries in the Asia-Pacific region was driving structural change within the fuels supply chain in Australia and putting huge commercial pressure on smaller scale plants.
Its against this background that we have concluded that the best option for strengthening BPs long-term supply position in the East coast retail and commercial fuels markets is to purchase product from other refineries," he said.
And while more of our transport fuel demand will be met by imports in future,ample supplies are available to maintain Australias energy security," he continued.
While this decision will significantly improve our competitive position,it will result in job losses, and I would like to acknowledge the enormous commitment and contribution made over many years by our staff at Bulwer Island. We will be doing everything we can to support them through this transition.
To ensure no disruption to customers, alternate supply arrangements have been made. This includes imports of jet fuel and a long-term agreement with Caltex for the provision of motor spirit and diesel from the nearby Lytton refinery.
It is expected that it will take some 12 months to implement the changes required to maintain supply and safely shut down the process units.
Once processing has been halted,the import jetty, aviation fuel tanks and associated pipelines will remain operational while other storage tanks and pipelines will be placed on a care and maintenance basis pending a decision to convert the site to a multi-product import terminal.
The processing units will be isolated and made safe while plans for their eventual removal and any environmental remediation are developed.
BP currently employs some 380 staff at the refinery. Between now and mid-2015 this is expected to fall to around 25.
The Bulwer Island refinery was built on reclaimed land by Amoco between 1964 and 1965 and was bought by BP in 1984.
Over the years it has been subject to a number of modifications and improvements. In 2000, it was significantly upgraded to produce low-sulfur fuels.