Australia to Study First New Oil Refinery Since the Sixties

w3)fs}vp)8o7o[kc(moz[ndk_media_dl_1.png Bloomberg News

Article content

(Bloomberg) — Australian federal and state governments and industrial company Perdaman Group will study the feasibility of a new oil refinery in a move to rebuild domestic capacity after the Iran war highlighted the nation’s dependence on imported fuels.

Article content

Prime Minister Anthony Albanese Tuesday announced a study for a new refinery in Karratha in Western Australia, backed by A$4 million ($2.8 million) of government funds. The project, which would be built and operated by closely held Perdaman Group, would be the first oil-processing plant to start in the nation since 1965 if it goes ahead. 

Article content

Article content

Article content

If built, the refinery would create thousands of jobs and help fuel security — especially in supplying diesel for regional communities in Western Australia, according to a statement from the prime minister’s office. Karratha is in the Pilbara region where many of the nation’s iron ore mines are located, and is also close to natural gas production facilities.

Article content

Article content

Australia currently has just two oil refineries that are able to supply less than a fifth of its fuel needs, which led to price spikes in April and May as the closure of the Strait of Hormuz tightened global supplies. While the nation produces some of its own crude, output is limited — meaning any new processing plant would still be reliant on imports. 

Article content

“At a time when overseas conflicts demonstrate the fragility of energy supply chains, investing in further onshore sovereign fuel refining capability is a sensible and prudent response to secure our energy security,” Energy Minister Chris Bowen said in a statement. 

Article content

Perdaman — owned by billionaire Vikas Rambal — is also building a multibillion-dollar fertilizer plant in the region, which is expected to come online around the middle of 2027 in a move designed to lower the agriculture sector’s reliance on imports for its vital supplies of crop inputs. The facility will be able to produce as much as 2.3 million tons of fertilizer a year — a significant proportion of Australia’s annual usage, according to the company.

Article content

Article content

That project has been supported by A$475 million in government loans, according to a statement from the Prime Minister’s office. The study announced Tuesday is part of an A$15 billion package to strengthen Australia’s energy resilience. 

Article content

“This is about fuel security for the whole nation,” Resources Minister Madeleine King said on radio on Tuesday morning. “The combination of that in fuel security as well as the security of fertilizer through the Perdaman urea project here in Karratha, which the government has been behind from the very beginning, are two very important projects.”

Article content

—With assistance from Ben Westcott.

Article content

(Updates with map, details of announcement.)

Article content