Australia's federal government and the Western Australia (WA) state administration have pledged to co-fund a A$4mn ($2.7mn) pre-feasibility study into a proposed new oil refinery near the WA city of Karratha.
The refinery of unknown capacity was proposed by fertiliser company Perdaman and would be built in WA's Pilbara region, adjacent to the majority of Australia's 924mn t/yr iron ore industry, a key user of gasoil for transport and mining operations. Gasoil imports to the harbours at nearby Port Hedland and Dampier were around 40,000 b/d and 21,000 b/d last year, according to data from vessel-tracking firm Kpler.
A fuel refinery would build resilience into WA's energy system and keep the A$90bn mining industry running despite any future shocks, the state's energy minister Amber-Jade Sanderson said on 28 July.
The Australian government included A$10mn in its latest federal budget to support feasibility studies into new or expanded refining capacity around three months after the US-Iran war begun. The studies are to be co-funded with state and territory governments.
Australia held 32 days' worth of gasoil consumption, equivalent to 22.23mn bl worth of stocks in-country or within its exclusive economic zone on 21 July, latest government data show. Australia also held 42 days' worth or 11.41mn bl of gasoline stocks and 32 days' or 5.61mn bl of jet fuel.
The WA government was the first state to create its own gasoil reserve in April with the purchase of around 25,000 bl to be stored at Wyndham in the Kimberley region. The state added around an additional 75,000 bl later that month to reserves based in Esperance and Kwinana. The state governments of South Australia and Victoria have also since created their own reserves.
Perdaman is constructing its 2.3mn t/yr Project Ceres urea plant on the Burrup peninsula north of Karratha, which has an uncertain first production date but could be as early as 2027.
Refining downturn
WA formerly hosted the 146,000 b/d Kwinana refinery which was Australia's largest when it was closed by BP in 2021 and converted into a products import terminal. The company had proposed building a plant to produce 10,000 b/d of renewable diesel and SAF from renewable feedstocks, but froze the development last year citing uncertainty around government biofuel policies.
BP also cancelled a proposed 105MW H2Kwinana renewable hydrogen plant in June, after failing to secure state subsidies for the project.
Australia's refining capacity fell to 229,000 b/d between 2013 and 2021 following major facility closures, with total refining capacity closures since 2013 exceeding 570,000 b/d.
Remaining ventures are the 128,000 b/d Geelong refinery in Victoria, operated by domestic refiner Viva Energy and the Ampol-run 109,000 b/d Lytton plant near Brisbane city.