Andy Holmes, President of BP Australasia, said that the growth of very large refineries in the Asia-Pacific region was driving structural change within the fuels supply chain in Australia and putting huge commercial pressure on smaller scale plants.
“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.
“And while more of our transport fuel demand will be met by imports in future, ample supplies are available to maintain Australia’s energy security.”
Holmes continued: “While this decision will significantly improve our competitive position, it will result in job losses and I would like to acknowledge the enormous commitment and contribution made over many years by our staff at Bulwer Island. We will be doing everything we can to support them through this transition.”
To ensure no disruption to customers, alternate supply arrangements have been made and this includes imports of Jet fuel and a long-term agreement with Caltex for the provision of motor spirit and diesel from the nearby Lytton refinery.
It is expected that it will take some twelve months to implement the changes required to maintain supply and safely shutdown the process units.
Once processing has been halted, the import jetty, aviation fuel tanks and associated pipelines will remain operational while other storage tanks and pipelines will be placed on a care and maintenance basis pending a decision to convert the site to a multi-product import terminal.
The processing units will be isolated and made safe while plans for their eventual removal and any environmental remediation are developed.
BP currently employs some 380 staff at the refinery and between now and mid-2015 this is expected to fall to around 25.
Tim Wall, Managing Director of Bulwer Island refinery, said: “This is a sad day for all of us at Bulwer and I know that these changes will be difficult for our employees.
“We will be putting measures in place to assist our affected employees, including transitional support and job placement assistance.
“Given the quality of our people, I’m confident that those who choose to look for alternative employment will be highly regarded by employers in this area,” said Wall.
The Bulwer Island refinery was built on reclaimed land by Amoco between 1964 and 1965 and was bought by BP in 1984. Over the years it has been subject to a number of modifications and improvements and in 2000 was significantly upgraded to produce low sulphur fuels.