CANBERRA: Australia’s oil product imports in 2015 are expected to grow at the fastest pace in at least seven years as it shuts another ageing refinery, putting it on track to become Asia-Pacific’s second biggest gasoline importer by the end of the decade.
Higher Australian imports should curb losses in Asian diesel margins that have dropped 14 percent this year due to expanding refining capacity in the Middle East.
“The shutdown of the refineries will mean a big increase in imports, which will give some relief to (an oversupplied) oil market,” said Richard Gorry, director at JBC Energy Asia.
Australia, which relies heavily on diesel to operate mines and carry output to ports, is the Asia-Pacific region’s top importer of the fuel. Diesel makes up more than half of its total oil product arrivals.
There are worries rising dependence on imports could hit Australia’s energy security, but the country sought to allay concerns in a white paper last week, saying diversity of global crude and fuel markets would help maintain supply reliability.
Many of Australia’s ageing refineries have shut or converted into fuel terminals as they chalked up losses amid competition from newer mega-processing sites in Asia.
BP will cease production at its 102,000 barrels-per-day (bpd) Bulwer Island refinery in Brisbane in May, following closures by Royal Dutch Shell, Caltex Australia and Exxon Mobil Corp over the past few years.
Due to the shutdowns, Australia will import about 30 percent to 42 percent more oil products this year, consultancies Wood Mackenzie, FGE and JBC Energy said. This implies an additional supply of 110,000 to 157,00 barrels per day versus 2014 levels.
That would be the biggest rise since at least 2007, Reuters calculations based on Australian government data show.The country’s overseas purchases of oil products are set to climb also because output from its remaining four ageing refineries needs to be shut sometimes for maintenance purposes.
Australia’s demand for diesel is seen rising by about 2 percent to 3 percent this year, while jet fuel demand could grow 2 percent to 7 percent, the consultancies said.But gasoline demand may remain flat or drop about 1 percent, as consumers switch to more energy-efficient automobiles.
