Australian oil producer, Caltex, has closed the last remaining refinery in Australia due to quality and costs.
The company finally terminated operations at its Kurnell plant, Sydney, at the end of 2011 after a staged shutdown which had begun with an announcement in 2009. According to Lube Report's George Gill, the closure was due to a combination of cost-cutting and efficiency enhancement.
The plant was producing 3,300b/d of API Group I base oil but, with demand for the low quality oil shrinking dramatically as the need of high performance, energy efficient lubes increases, Caltex took the decision to close Australia's only remaining operational refinery.
Although, according to the report, there is a possibility that the Kurnell refinery could be upgraded for Group II production at some point in the future, it is deemed unlikely to happen, not least because the cost of shipping domestically refined products around Australia is more costly than direct shipments to Australian ports from other parts of Asia.
Until 2002, Australia had four operational refineries producing around 790,000 metric tons annually. However, all were producing Group I product and were gradually closed, leaving only Kurnell.