Triangle Energy has received a formal notice of termination from BP for its crude oil supply agreement with the Kwinana oil refinery in Western Australia.
Since BP announced plans to stop fuel production at the refinery and convert it into a fuel import terminal in October last year, Triangle met with with state and federal governments to find a solution for its future oil production from Cliff Head.
BP advised Triangle that the agreement would terminate on February 16, 2021, with the Cliff Head oil field to continue to produce and deliver its product to the refinery until then.
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 has made the decision because the growth of large-scale, export-oriented refineries throughout Asia has structurally changed the Australian market.
The new terminal will support construction work out to 2022. Once complete, the import terminal is expected to support around 60 jobs.
Triangle’s managing director Rob Towner said in November last year that since the company became 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.
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