Tuesday, Shell (NYSE: RDS.A) (NYSE: RDS.B) announced a proposal to convert its Clyde Refinery and Gore Bay Terminal in Sydney Australia into a fuel import terminal.
If accepted by the relevant Shell Australia boards, the proposal would see the end to refining operations at the site, with Clyde converted to a competitive fuel import terminal, well located to supply the New South Wales market and the growing western suburbs of Sydney.
The proposal recognizes the 75,000 barrel per day Clyde Refinery is no longer competitive against new mega-refineries in the region – and requires significant investment including a maintenance turnaround scheduled for mid 2013.
Employees at Clyde and Gore Bay have been informed of the proposal and a period of consultation with them and their representatives will be undertaken before a decision is made on the proposal.
“The proposal to convert Clyde into a terminal is consistent with Shell’s strategy to focus its refining portfolio on larger integrated assets, and to build a profitable downstream business here in Australia,” said Shell vice-president, Andrew Smith.
“Shell acknowledges the valuable contribution made by local employees in servicing the New South Wales market for more than 100 years. We commit to a timely consultation process and to providing support to our employees during this period,” added Mr Smith.
Shell's commitment to growth and investment in its Australian downstream business includes recent announcements, such as the construction of new diesel storage in Mackay, Newcastle, Kalgoorlie and King Bay in WA; a $47 million investment in a water processing plant at the Geelong Refinery; a $27 million investment in bitumen facilities at the Geelong Refinery and in Brisbane; the construction of a new wharf on the Brisbane River; and an $80 million investment in retail sites – Shell’s largest ever investment in service stations.
Over the next ten years Shell anticipates being one of Australia’s largest investors – with Australia underpinning Shell’s next tranche of global LNG growth.