All Jet Fuel In Australia To Be Imported In 2014

[mnewbery]

In a classic case of not thinking we can do things here better than our competitors to the north, the closure of Shell and Caltex refineries will end the production of jet fuel in the strategically important Sydney Basin market.

 

Caltex refinery is in Kurnell.

 

Shell refinery is in Clyde.

 

http://www.heraldsun.com.au/news/national/we-still-make-stuff-in-sydney-but-only-just/story-fndo317g-1226449453779

 

http://www.heraldsun.com.au/news/national/fuel-giant-caltex-commits-to-brisbane-refinery/story-fndo45r1-1226459356045

 

http://microsites.caltex.com.au/thestar/issues/40-Dec-Jan-08/b_Does_Australian_oil_refining_really_matter~.asp

 

Both were making at least a little money but due to ageing infrastructure (e.g. 1950's technology in the case of Kurnell) these would need hundreds of millions of dollars in new capital to remain competitive with international competitors for example:

 

MRPL Bangalore India

 

Formosa Petrochemicals Taiwan

 

Interestingly big refiners like Tesoro, Sinopec and BP are often seen buying jet fuel to cover their production shortfalls. Further, Australia has Gippsland or Cossack grade (heavy as in API gravity 42 to 61+) crude oil with small reserves of much lighter oil (half the viscosity, API gravity 21). Great for making diesel, virtually useless for making jet fuel.

 

Caltex is optimising its Bulwer refinery in Brisbane for premium unleaded. Everything else there will go to transport diesel or bunkering fuel for cargo ships. Its right on the Brisbane river so they are golden. No jet fuel from Brisbane.

 

Finally, while Australian fuel production of diesel has remained almost constant for 10 years, consumption has doubled with the shortfall being covered by imports at TAPIS prices. 10% of the output from Mobil refinery in Altona is jet fuel. Thats a maximum of 47ML jet fuel per year mostly from oil piped out of Bass Strait.

 

How much jet fuel does Australia actually use?

 

6500 to 7000 ML per year with an historical increase of 5-8% per year.

 

Altona doesn't count.

 

Original image at: http://en.wikipedia.org/wiki/File:Ride_with_hitler.jpg