Fuel crisis warning over refinery closures

Energy Matters0

Fuel crisis warning over refinery closures

February 17, 2012 – 3:04PM

Australia could find itself short of fuel if Caltex shuts down its two domestic refineries, the mining union says.

Caltex Australia has flagged shutting its two domestic refineries in Sydney and Brisbane, putting 800 jobs at risk.

The move would leave NSW without any refining capability, the CFMEU said, and a war or natural disaster could create a national fuel supply crisis.

Caltex Australia reported on Thursday that it had written down the value of the refineries by $1.5 billion, partly because of the effect of the strong Australian dollar on its business.

More than 800 people are employed at the refineries, in Kurnell in Sydney and Lytton in Brisbane, which provide almost one third of the country’s total refining capacity of about 800,000 barrels a day.

The closures would leave Australia with five operating refineries.

The announcement followed Shell’s statement last year it planned to close its refinery at Clyde and use the site as a storage and distribution site for imported refined fuel.

“When Shell announced it would close Clyde, it was quick to reassure there would be no threat to supply, as Sydney still had another refinery,” CFMEU NSW Energy District Secretary Lorraine Usher said in a statement today.

“Now that Kurnell’s future is also at risk, where does that leave us?”

She said further closures could jeopardise Australia’s oil refining capacity to the point where the country could struggle to meet its defence fuel supply needs.

“There are serious long-term implications,” she said.

“War or natural disaster in the Asia-Pacific could lead to a fuel supply crisis for Australia.”

Caltex Australia chief executive Julian Segal said yesterday that a review of the two refineries was six months from being completed.

He said shutting down the refineries was on the table but no decision had been made yet.


Read more: http://www.smh.com.au/business/fuel-crisis-warning-over-refinery-closures-20120217-1tdep.html#ixzz1mcPMCTk6

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