BP to cease production at Bulwer Island refinery, Australia

The Bulwer Island refinery in Brisbane, Queensland, is to cease production by mid 2015, according to an announcement by BP.

The 102,000 barrels per day refinery covers an area of about 120ha and produces petrol, diesel, kerosene, aviation fuel, heating oil and liquefied petroleum gas (LPG).

BP Australasia president Andy Holmes said there is a huge commercial pressure on smaller-scale plants due to the growth of large refineries in the Asia-Pacific region, which is driving structural change within the fuels supply chain in Australia.

"It’s against this background that we have concluded that the best option for strengthening BP’s long-term supply position in the east coast retail and commercial fuels markets is to purchase product from other refineries," Holmes said.

BP’s latest decision is expected to improve the company’s competitive position considerably, although it will result in job losses.

The company has made alternate supply arrangements, including the import of jet fuel and a long-term agreement with Caltex to provide motor spirit and diesel from the nearby Lytton refinery, to ensure that customer service is not disrupted.

According to the company, it may take about a year to implement the changes required to maintain supplies and safely shutdown the process units.

The import jetty, aviation fuel tanks and associated pipelines will remain operational after processing has been halted.

Other storage tanks and pipelines will be placed on a care and maintenance basis and the processing units will be isolated and made safe while plans are developed for their eventual removal and any environmental remediation.

BP currently employs 380 staff at the refinery, which is expected to fall to around 25 workers between now and mid 2015.

The Bulwer Island refinery was built on reclaimed land by Amoco between 1964 and 1965, and bought by BP in 1984.