Perth Basin oil producer, Triangle Energy (Global) Limited, has received a notice of variation of the termination date from BP under the Crude Oil Supply Agreement, in relation to the Kwinana oil refinery in Western Australia. According to the notice, the termination effective date has been extended from 16 February 2021 to 1 March 2021.
The company noted that the Cliff Head Oil Field, located approximately 270 kilometres north of Perth and 12 kilometres off the coast of Dongara in Western Australia, will continue to produce and deliver its product to the BP refinery in Kwinana until this time and as previously disclosed, Triangle is continuing discussions with crude oil marketing firms regarding offtake alternatives available to it.
BP Australia announced plans in October 2020 to cease fuel production at its Kwinana Refinery and convert it to an import terminal.
The refinery, near Fremantle, has provided fuels for Western Australia for 65 years. However, the continued growth of large-scale, export-oriented refineries throughout Asia and the Middle East has structurally changed the Australian market.
In the announcement, BP noted that regional oversupply and sustained low refining margins mean the Kwinana Refinery is no longer economically viable.
Having explored multiple possibilities for the refinery’s future, BP concluded that conversion to an import terminal is the best option.
As at October 2020, the refinery currently employs around 650 people – 400 permanent staff and 250 contractors.
BP will wind down refining activities over the next six months, with a conversion workforce supporting site works. The new terminal is expected to support construction work out to 2022. Once complete, the import terminal is expected to support around 60 jobs.