Kwinana safe, says BP

The managing director of BP's Kwinana oil refinery, Desmond Gillen, says the global energy giant still has no plans to shut down the facility.

The Kwinana refinery, which provides the majority of Western Australia’s fuel needs and produces 140,000 barrels of fuel every day, will turn 60 next year.

BP recently spent $60 million overhauling the refinery, which is Australia’s largest.

Speaking at the Australian Institute of Energy national energy conference in Perth today, Mr Gillen said despite announcing the closure of the Bulwer refinery in Brisbane last year, BP had no such plans for the Kwinana refinery.

“Let me be clear that BP remains fully committed to the Kwinana refinery and our critical role in supplying infrastructure in Western Australia,” Mr Gillen said.

He said the refinery was economically viable, in particular because it operated in a less competitive market than that on the east coast, and because it had additional capabilities.

“Each refinery is different ... there are a number of unique things about Kwinana. One is it’s the only refinery for about 3,000 kilometres in any direction ... so the supply chain is considerably different for us than it is on the east coast,” Mr Gillen said.

“We make high-octane fuel in a much larger proportion than other refineries do and we’re also able to proves a lot of local crudes and light condensates that some of the other refineries can’t do so from our point of view it’s not an easy job but we believe that through our own ingenuity and our own efficiency that we can continue to do that.’’

However Mr Gillen admitted there were challenges in operating a refinery in Australia while mega refineries in Asia had clear cost and size advantages.

“The refinery remains economically viable and a valued component of BP’s downstream business, but nobody owes us a living and we operate in a very competitive environment so we need to continue to improve our safety, our reliability and our cost competitiveness in order to stay alive and stay secure and we fully intend to do so,” he said.

“From Kwinana you can expect a safe reliable operation and we will play our full part in underpinning WA’s energy supply and energy security.

 “It’s our job as a refining industry to find ways to stay competitive.”