Caltex To Reduce Operations At Sydney Refinery

Caltex Australia Ltd. (CTX.AU) said Thursday that it will close one of two gasoline refining systems at its Kurnell facility in Sydney, as Australian refiners continue to rationalize their business in the face of mounting competition from large, low-cost Asian rivals.

Caltex, which is half owned by Chevron Corp. (CVX), said it will cease to operate a catalytic cracking unit at Kurnell by February 2013. It will also close a bitumen manufacturing unit.

The second cracker will remain operational and Caltex said by increasing its utilization, overall production levels will not be materially affected.

Caltex's decision comes after Royal Dutch Shell PLC. (RDSB.LN) this year converted its Clyde refinery in Sydney into a fuel import terminal.

Caltex also owns the Lytton refinery in Brisbane.

It said it will take a A$77.7 million impairment charge related to the rationalization at Kurnell.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

Caltex Australia (ASX:CTX)
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