Kwinana shutdown: Perth Basin's oilers react 

THE shutdown of BP’s Kwinana refinery south of Perth has been as much of a surprise for the oilers who send products there as anyone else. 
Kwinana shutdown: Perth Basin's oilers react  Kwinana shutdown: Perth Basin's oilers react  Kwinana shutdown: Perth Basin's oilers react  Kwinana shutdown: Perth Basin's oilers react  Kwinana shutdown: Perth Basin's oilers react 

Triangles Cliff Head Alpha platform

Helen Clark


Today the company announced it would transition the refinery to an oil import terminal, leaving Western Australia with no domestic refining capacity and no option for the Perth Basin's small number of oil explorers and producers but to send any product offshore. 
Triangle Energy boss Rob Towner said he'd been told by a BP representative at 10:30 this morning, not long before the release went out. The company announced a trading halt at 11:20. 
Triangle produces from the offshore Cliff Head field in the Perth Basin and sends crude via truck to the refinery. It has just completed two well workovers and a reserves update, announced yesterday. 
"You'd think normal working relationships would have given us more notice."
"I put my head in my hands and went shake, shake, shake...  this is just how it rolls. This could be a new beginning."
 At this point Towner hasn't considered options. 
"We're still going to be delivering oil until they close," he told Energy News. 
"It hasn't been on anyone's radar that they were going to close, there was no hint to anyone in the industry that this was going to happen any time soon,"  RCMA Australia chief Chris Newport told Energy News. 
RCMA is planning to drill its large Cervantes prospect in the second half of next year and announced earlier this week it had joined with Refine Energy for a two-well campaign in another section of its Perth Basin L14 license. 
The two wells - Tarram and Agile - are targeted to produce 8.2 million barrels of oil on a base case and 250 barrels of oil per day from the Jingemia oil attic in the historic field. RCMA noted Tuesday one of its selling points was the Kwinana refinery just 350km south. 
Newport however, is unworried any new production won't have a route to market. 
"For a crude oil producer, crude oil can always be exported through tanks, there's always a market from our perspective there's still a market for crude oil but it just seems to me to be quite a surprise, given how strategic that refinery is to one third of Australia," he said. 
"There are export options via Geraldton's deep water port and tanks there, that's always been an option for us but with an existing refinery serving Western Australia that was a very good customer... for us it's definitely disappointing to hear them talk about moving out of the country."
"It's not necessarily more expensive, it's a volume question. In a Cervantes style scenario the economics would generate a higher netback than selling out of Kwinana."
Pilot Energy holds an interest in offshore historic Cliff Head oil field via operator Triangle, which also operates the Arrowsmith processing facility and holds separate offshore oil acreage it is conducting an offshore wind farm feasibility study on. 
Chairman Brad Lingo had not heard of the closure until asked by Energy News but was unworried. 
"When I was at Drillsearch they shut down the Point Steinbeck refinery and we used Point Bonython and we continued to produce oil profitably from the Cooper (Basin)," he said. 
‘So it just means you've got to change your sales chain. It is oil, it's fungible. There's more than one export point in Western Australia and not all crude produced in Western Australia was going to Kwinana."
He said the most likely option was to aggregate production for export with other local players. 
"That's exactly what happens coming out of the Cooper and Santos acted as the aggregator and marketer and I'm sure it will be the same thing in Western Australia."
Santos did not respond to questions from Energy News by deadline.