ExxonMobil Australia is to convert its Altona refinery in Victoria, Australia, into an import terminal, leaving Australia with just two operational refineries.
The company says that a review found that Altona is no longer economically viable, and that by converting it into an import terminal, it will ensure ongoing, reliable fuel supplies. ExxonMobil’s review looked at the competitive supply of products into Australia, declining domestic crude oil production, future capital investments and the impacts of these factors on operating earnings.
The 90,000 bpd refinery has been operational since 1949 and is Australia’s smallest. Petrol makes up 60% of its production, diesel 30% and jet fuel around 10%. The site has around 100 storage tanks for crude and refined products awaiting distribution. 90% of the refinery’s output goes to Mobil’s Yarraville terminal and other industry terminals for distribution by road, with some also supplying the Altona chemical complex. It will remain operational during the transition into a terminal.
‘We are grateful for the tremendous efforts by our employees to improve the viability of the operation,’ says Nathan Fay, chairman of ExxonMobil Australia. ‘We extend our thanks to the federal government for the significant support offered to Altona and other refineries. Our decision to convert our facility to a terminal is not a reflection of those efforts.’
ExxonMobil’s decision follows that of BP, which in November 2020 announced that it would convert its Kwinana refinery near Fremantle in Western Australia into a terminal, also saying it was no longer economically viable. The future of Australia’s remaining two refineries is also uncertain. Viva Energy said in August 2020 that it plans to start designing an LNG terminal at its Geelong refinery site before the end of 2020, following ‘unsustainable’ refining losses, while Ampol said, also in August, that it is reviewing operations at its Lytton Refinery in Queensland. Fearing supply problems, the Australian government announced a A$211 million (€129 million) package in September 2020 to ensure long-term fuel security, including building new storage capacity and providing financial support to local refineries. However, its success with refining seems limited.