BP is to boost the sourcing of oil products from rival Caltex following its decision to close its Brisbane refinery at Bulwer Island.

The refinery, which has the capacity to refine 102,000 barrels a day of oil, is to close by mid-year.

The closure follows Caltex’s decision earlier to shutter its Kurnell refinery in Sydney, which has been converted to an import terminal. The Kurnell refinery closure, which had the capacity to refine 124,500 barrels a day of oil, leaves Caltex with the Lytton refinery in Brisbane, which can handle 106,000 barrels a day.

BP said it would turn to imports for its jet-fuel needs while sourcing motor spirit and diesel from Caltex’s nearby Lytton refinery.

“While more of our transport fuel demand will be met by imports in future, ample supplies are available to maintain Australia’s energy security,” BP’s local head, Andy Holmes said.

Once processing has been halted, the import jetty, aviation fuel tanks and associated pipelines will remain operational while other storage tanks and pipelines will be placed on a care-and-maintenance basis pending a decision to convert the site to a multi-product import terminal, BP said

BP employs 380 staff at the Bulwer Island refinery and this is expected to fall to about 25 by the middle of the year.

Built originally by Amoco, the refinery was acquired by BP in 1984.

There has been occasional industry speculation that following the closure of the Kurnell refinery, that Caltex could look to acquire other oil retailers, such as BP, with the sale by Chevron of its half-interest in Caltex last week expected to boost Caltex’s appetite for acquisitions.

BP has a network of some 1300 retail service stations.

Chevron of the US sold its half-interest in Caltex a week ago at $35 a share, with the share price consolidating at around this level in more recent trading. The shares had traded to as high as $38.81 earlier in the year.

Extracted in full from the Sydney Morning Herald.