Exxon to Shut Altona Refinery, Convert to Import Terminal
February 09 2021 - 7:11PM
Dow Jones News
By David Winning
SYDNEY--Exxon Mobil Corp. said it will cease producing fuel at
its Altona refinery in Australia and convert the site to an import
terminal because it no longer considered the operation to be
economically viable.
Exxon said the decision was made following an extensive review
of operations at Australia's smallest refinery, which has been
operating in Victoria state since 1949. It puts the country on a
path to having two refineries within a few months, from seven
refineries a decade ago.
The shutdown of the Altona refinery is part of a rash of global
closures in the world's richest economies as operators reckon with
anemic fuel demand and growing competition from newer, more
efficient fuel-making facilities in Asia and the Middle East.
Last year, BP PLC said it would close the Kwinana refinery in
Western Australia while Ampol Ltd. is continuing to review its
Lytton refinery on Australia's east coast. As of 2018, domestically
refined fuels met just 40% of demand in Australia, which has become
increasingly dependent on imports.
The threat of refinery closures has angered unions and prompted
the government to offer financial aid, even though it has turned
down requests for help from other businesses hurt by the pandemic,
including Australia's second-largest airline, which became
insolvent in April.
"The Altona refinery workers are highly skilled and valued by
their employer," said Tim Kennedy, national secretary of the United
Workers Union. "However our domestic labor market has been hollowed
out so extensively that these workers will likely not have
equivalent jobs to move into once the site closes."
Prime Minister Scott Morrison's government says it is willing to
give cash to refiners that stay open, worried that boosting imports
will drive up prices for fuels such as diesel that are used by
farmers and for mining trucks. It has offered to subsidize every
liter of fuel refined in Australia, and build new diesel-storage
tanks.
That offer wasn't enough to persuade Exxon to keep the refinery
open beyond a period of transition work to ensure continued fuel
supply for customers.
"We extend our thanks to the federal government for the
significant support offered to Altona and other refineries," said
Nathan Fay, chairman of Exxon Mobil Australia. "Our decision to
convert our facility to a terminal is not a reflection of those
efforts."
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
February 09, 2021 18:56 ET (23:56 GMT)
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