Triangle Energy has secured a change in its termination notice from BP for their crude oil supply agreement at the Kwinana oil refinery in Western Australia.
BP originally advised Triangle that it would terminate the agreement on February 16, 2021, with the Cliff Head oil field to continue to produce and deliver its product to the refinery until then.
Last month the company extended the date to March 1, 2021 and has since changed it to March 22, 2021.
Under the amendment, BP have agreed to purchase the crude under the same pricing terms to be realised under a proposed off-take agreement.
Since BP announced plans to stop fuel production at the refinery and convert it into a fuel import terminal in October last year, Triangle has met with with state and federal governments to find a solution for its future oil production from Cliff Head.
In addition, the company is continuing discussions with crude oil marketing firms regarding off-take alternatives.
According to BP, regional oversupply and sustained low refining margins meant the Kwinana refinery was no longer economically viable.
After exploring multiple possibilities for the refinery’s future, BP concluded that conversion to an import terminal was the best option.
The refinery has provided fuels in the state for 65 years. However, BP made the decision because of the growth of large-scale, export-oriented refineries throughout Asia, which have structurally changed the Australian market.
BP’s proposed import terminal will support construction work out to 2022. Once complete, the facility is expected to support around 60 jobs.
Triangle’s managing director Rob Towner, speaking in November last year, said since the company had become a registered operator of Cliff Head in July 2018, it had reduced operating costs, increased capacity, extended the economic life of the project and demonstrated the prospectivity of the Perth Basin.
“As BP had advised that the Kwinana refinery will continue in its current state for some time, the company’s current production portfolio and operations are expected to remain unaffected for the near-term. The company produced 53,246 barrels for the quarter ending September 20, 2020,” Towner said.