By Sonali Paul
MELBOURNE (Reuters) – BP plc (L:) plans to stop producing fuel in Australia and will convert its Kwinana oil refinery, the biggest of the country’s four, into a fuel import terminal, thanks to tough competition in the Asian market, the global major said on Friday.
BP said it would wind down operations at the plant in Western Australia over the next six months, affecting 650 jobs, but did not say how much the conversion would cost.
“Regional oversupply and sustained low refining margins mean the Kwinana refinery is no longer economically viable,” it said in a statement.
The move comes despite government efforts to build up national fuel security with incentives of A$2.3 billion (1.3 billion pounds) to Australia’s four refiners to keep their plants open.
BP’s domestic rivals, Viva Energy (AX:) and Ampol (AX:), have both said they are also considering shutting their refineries and converting them to fuel import terminals.
In a drive to become a clean energy provider, BP said it was also considering developing Kwinana as a clean energy hub to produce and store lower carbon fuels, such as renewable diesel produced from waste.
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