However he mentioned this reliance might damage the state and the remainder of the nation down the monitor if provide chains have been disrupted.
“The issue we have currently is that there is insufficient storage capacity,” he mentioned.
“In 2019-20, Australia solely had stockholdings of diesel oil to final 20 days, automotive gasoline to final 25 days, and aviation turbine gas to final 26 days.
“So within the occasion of provide chain disruptions … Australia might discover itself undersupplied, which might result in vital safety issues or financial points.
“The mining, agriculture and transport sectors are vital contributors to the economic system and all are closely depending on having safe gas provides.”
Mr Thomson mentioned with Kwinana closed, Australia would have simply three refineries in operation which have a mixed capability decrease than a single common refinery in Asia.
Crude oil and pure gasoline costs are anticipated to rise this 12 months, offering some much-needed help to refineries, however IBISWorld nonetheless forecast extra would shut with just one refinery taking the federal authorities up on a latest manufacturing cost incentive.
BP introduced the closure of the terminal in October, blaming cheaper gas producers in locations like Asia and the Center East.
About 590 jobs will go because of the closure and the power shall be transformed into an import terminal when manufacturing stops.
A modification to the state settlement was made on October 28, 2020 to permit the change.
A state authorities spokeswoman performed down issues about gas safety and mentioned the refinery was already virtually absolutely reliant on imported crude oil.
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“The refinery has successfully relied entirely on fuel imports in the past when it temporarily shut down every four years for maintenance work,” she mentioned.
“The corporate has suggested that it has adequate capability proper now for the storage of refined merchandise with extra tankage obtainable if required.
“Underneath its State Settlement, BP is required to co-operate with the state to make sure that the availability of and distribution of petroleum (together with aviation gas) inside Western Australia will not be adversely affected in any materials respect by the closure of the crude oil refining and the transition to a gas import facility.”
The federal authorities’s gas safety coverage features a proposed $200 million gas safety package deal for brand spanking new storage amenities.
Hamish Hastie is WAtoday’s enterprise reporter.
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