Shell to close Australia refinery amid high competition, will convert site to fuel import terminal
Shell is proposing 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 end refining operations at the site, with Clyde converted to a fuel import terminal, well located to supply the New South Wales market and the growing western suburbs of Sydney, the company said.
Shell said the 75,000 bpd 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,” he added. “We commit to a timely consultation process and to providing support to our employees during this period.”
Shell's commitment to growth and investment in its Australian downstream business includes recent announcements, it said, such as:
- construction of new diesel storage in Mackay, Newcastle, Kalgoorlie and King Bay in Western Australia
- $47 mn investment in a water processing plant at the Geelong refinery
- $27 mn investment in bitumen facilities at the Geelong refinery and in Brisbane
- construction of a new wharf on the Brisbane River
- an $80 mn investment in retail sites – Shell’s largest ever investment in service stations
Over the next 10 years, Shell anticipates being one of Australia’s largest investors, it said – with Australia underpinning Shell’s next tranche of global LNG growth.
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