Fuel security fears as BP cans WA refinery

BP plans to convert its refinery in WA into an import terminal, resulting in hundreds of job losses.
BP plans to convert its refinery in WA into an import terminal, resulting in hundreds of job losses.

Federal Labor leader Anthony Albanese has called on the Morrison government to stop the closure of BP's Kwinana refinery in Western Australia, saying it is critical for the nation's fuel security.

BP on Friday announced it will close the 65-year-old refinery, south of Perth, leaving hundreds of employees out of work.

The multinational oil and gas giant says regional oversupply and low margins mean the refinery is no longer viable.

There are currently 400 permanent staff and 250 contractors employed at the facility, which will be converted to an import terminal.

Mr Albanese says the closure will leave Australia with just three oil refineries, describing it as "simply untenable" for an island continent.

"Scott Morrison must immediately intervene to stop BP closing its Kwinana refinery," he told reporters.

"If this refinery is allowed to close and simply becomes an import facility, what that will mean is that the west coast of Australia will have no fuel security.

"The west coast is particularly important. It is, in terms of an export hub for Australia, so critical for our resources sector."

In an earlier statement, federal Energy Minister Angus Taylor said the Morrison government was deeply disappointed by the closure.

"As BP has made clear, its decision to close the refinery was based on commercial and international factors, including the age of the refinery and overseas competition," he said.

"Closure of the refinery will not negatively impact Australian fuel supplies."

BP said the continued growth of large-scale refineries throughout Asia and the Middle East had structurally changed the market.

"Generations of Western Australians have worked at the facility, building a fantastic legacy of safe and reliable operations that we will always be proud of," BP Australia head of country Frederic Baudry said in a statement.

"Today's decision to cease refining is a difficult one and not in any way a result of local policy settings."

Refining activities will wind down over the next six months and construction of the new terminal will continue through to 2022.

The new import terminal will support just 60 jobs.

"We deeply regret the job losses that will result and will do everything we can to support our people through the transition," Mr Baudry said.

WA Premier Mark McGowan said BP must honour its commitment to help workers find new jobs in the sector.

"This is an extremely disappointing outcome, and our primary concerns are the welfare of the dedicated workers at the Kwinana refinery and the continuation of fuel supply to WA," he said.

Australian Manufacturing Workers Union state secretary Steve McCartney said he feared the workers would be forced into fly-in, fly-out jobs.

"Many AMWU members who work in Kwinana do so because they can work in a critical job that literally fuels the economy, and still be home every night with their families," he said.

"Five months, including a Christmas period, is not long enough to substantively retrain workers."

Australian Associated Press