Australia has taken the first step towards building its first new oil refinery since the 1960s as the federal government seeks to bolster energy security amid the fallout from the Iran war.
Prime Minister Anthony Albanese and West Australian Premier Roger Cook on Tuesday announced a joint $4 million pre-feasibility study for a new large-scale oil refinery in Karratha.
It would be the nation’s third operating refinery, complementing operations in Geelong – which suffered a major fire earlier this year – and Brisbane, and create thousands of jobs.
Perdaman, a WA-headquartered multinational that began in India and is building a major urea production facility in the region supported by almost half a billion dollars in government loans, would build and operate it.
“The longer war in the Middle East goes on the greater the impact on Australia will be, and my government will continue to do everything we can to shield Australia from the worst effects – and set us up for the future,” Albanese said.
“My government’s working to advance Australia’s interests – not just in this crisis but going forward as well to ensure we can meet future challenges.”
Cook threw his support behind “Perdaman’s efforts to rebuild our state’s capacity to produce and distribute its own fuel”.
“This includes diesel to support the regional communities which drive WA’s economy and which have been most at risk amid this conflict,” he said.
The pre-feasibility study will investigate sites in Western Australia, primarily the midwest and southwest, for the refinery.
No information was provided about when the study would be due to report, how much the refinery would cost and when it could be ready, if it was found to be feasible.
“We want to make sure that we get the right location, but we want to make sure as well that it’s a project that stacks up that can go forward, and that’s why you do a proper feasibility study,” Albanese told reporters in Perth.
“We’re doing it in the right order.”
It comes as the government works to maintain refining capabilities in the decade beyond 2030, following the closure of six domestic oil refineries over the past 20 years.
Tuesday’s announcement forms part of the $15 billion effort to secure fuel, which includes boosting fuel reserves and increasing the minimum stockholding standard, in light of disrupted supply due to the war in Iran.
The government has also worked with countries in the Asia-Pacific region to form improved fuel and gas trade relations. On Monday, Australia signed a deal with Singapore to strengthen supply chains.
Australia imports 90 per cent of its liquid fuel needs.
Refineries turn crude oil into liquid fuels such as petrol for cars, diesel for trucks and aviation fuel for planes.
The fire in Geelong in April, combined with the global fuel crisis sparked by the US and Israel’s war on Iran, had sparked calls to overhaul Australia’s fuel supplies.
While Opposition Leader Angus Taylor and Nationals Leader Matt Canavan support more oil refineries, they criticised the government as they talked up their plan to scrap net zero and use all energy sources, including nuclear power.
“We support fuel refining, but we need to see a serious plan and you can’t have a serious plan when you’re supporting the net-zero policies that this government is supporting,” Taylor said.
“If it’s good enough to back oil in West Australia, it should be good enough to back coal here in Queensland because we need all of our energy horses running to get our economy firing again,” Canavan said.
Some experts have raised issues with increasing oil refining in Australia.
Grattan Institute Senior Fellow in Energy and Climate Change Tony Wood argued after the Geelong fire that Australia should be focusing on rapidly electrifying transport and producing more biofuel.
“Firstly, to run a refinery you need crude oil. Where is that going to come from?” he wrote in The Conversation.
“At the moment, Australia sends most of the oil it extracts from the north-west shelf in Western Australia to nearby countries like Singapore and Malaysia.
“In recent years, the Gippsland basin, offshore Victoria, has entered the depletion stage of its oil extraction after more than 50 years. While the north-west shelf remains a significant source of oil, very few other oil resources have been identified in Australia.”
Professor Mark Brown from the University of the Sunshine Coast said Australia had the capacity to produce between 400,000 and 500,000 litres a year of biofuel, but production was only at 30 per cent capacity.
Extracted in full from: https://www.nine.com.au/australia-news/wa/multimillion-dollar-move-to-build-australia-s-first-new-oil-refinery-since-60s-20260728-p60j21.html
