More closures possible in Australian refining sector

There could be some additional closures of Australian refinery capacity from this year through 2020, a study of the nation’s liquid fuels vulnerability by local consultancy ACIL Tasman Pty. Ltd. said. The study was commissioned by the federal government’s Department of Resources, Energy and Tourism. ExxonMobil Corp. mothballed a refinery in Australia in mid-2003, when it closed its 78,000 barrels per day (bpd) plant at Port Stanvac, citing the plant’s inability to compete in the poor market conditions prevailing at the time. ACIL Tasman said in its report that while ongoing incremental expansion of existing domestic refineries will probably occur, it is extremely unlikely that any new refineries will be constructed in Australia. “Given the importance of economies of scale in oil refining and the relatively small scale of the domestic refineries, there may be some further retrenchment of refining capacity coupled with the expected increasing reliance on overseas production of refined petroleum products,” the consultancy added. Australia has produced sufficient crude oil, condensate and LPG to meet around 59% of domestic demand in recent years, but domestic supplies of crude oil and condensate have accounted for just 28% of the nation’s refinery input in volume terms, ACIL Tasman said. The most significant recent decline in the level of self-sufficiency has been in regard to diesel, which has fallen from 96% in 2002 to 2003 to 65% in 2006 to 2007. (March 27, 2009)