Refining in Australia is a tough market, but as BP's Kwinana facility marks 60 years of operations, the team is looking towards a bright future
Industrial environments such as refineries don’t usually conjure up pictures of beaches, children’s Christmas picnics and thousands of tree saplings – not to mention kangaroos. But BP’s Kwinana refinery is no ordinary industrial environment. Located about 20 miles (35 kilometres) southwest of Perth, the largest city in Western Australia (WA), Kwinana began operations in 1955, built by European migrants on the site of smallholdings. Marking its 60th anniversary this year, it is Australia’s largest refinery and the only one in WA, supplying virtually all the petrol and diesel demand in the southwest of the state – and 100% of the jet fuel required by Perth airport. Over the past decade, WA’s mining boom provided the solid basis for sustained growth in fuel demand in the region. The mining industry is believed to have peaked in 2011, but Kwinana’s products still play a crucial role in fuelling mining customers, as well as the wealth of associated business.
“We were the very first industrial facility to be built in WA and all the smelters and petrochemical plants and other facilities developed around it,” says Des Gillen, refinery manager. “We supply virtually every drop of fuel in Perth, with around 70% of our production going into the local market while the other 30% is exported by ship.” Since BP took the decision in 2014 to close its Bulwer Island refinery in Brisbane, Kwinana is the business’s only remaining refining operation in Australia. Today, the nearest other refineries supplying Australian markets are situated thousands of kilometres away, in Eastern Australia, Singapore and elsewhere in Asia. Despite Kwinana’s location, lower labour costs and different operating conditions in Asia mean cheaper refining and the potential for increased imports of refined products into Australia. With this in mind, Kwinana needs to move with the times, while drawing on its long heritage. The refinery launched the Kwinana Improvement Programme (KIP) in mid-2014, a three-year programme with three main aims: to improve operational availability; to increase margins and refinery utilisation to get more value out of the refinery’s products; and lower costs to enable Kwinana to remain competitive.
The bedrock of an efficient and profitable operation is sourcing the right crudes in the first place. Kwinana gets the bulk of its crudes from the SE Asia region and the Middle East – while the remoteness of Kwinana’s geography makes it currently the lone contender for supply to the region, that geographical remoteness means effective crude purchase planning is central to Kwinana’s ability to keep supplying what WA needs. “Our remote location means we often have to plan our crude purchases months ahead, but we also need to be able to respond to the market,” says Laurie Constantin, the plant’s optimisation manager. “It’s about having the right types of crude at the refinery when we need it, so we can run the refinery to its maximum capability and make the products we need to make. We are investing this year in improving our blending capability, particularly for our petrol products, to help us get more value out of the refinery.” While the plant’s management acknowledges that a restructuring and headcount reduction earlier in 2015 was tough, this has strengthened the refinery and set it on the right path towards achieving its aims - Kwinana’s availability is now regularly reaching 97% compared with the previous 95%, and refinery utilisation is consistently hitting 90%, compared with a track record closer to 80%.
“We were the very first industrial facility to be built in WA and all the smelters and petrochemical plants and other facilities developed around it. We supply virtually every drop of fuel in Perth, with around 70% of our production going into the local market while the other 30% is exported by ship.”Des Gillen
Heart of the community
Kwinana is also an important source of employment in the area and, with multiple generations of the same families among its staff, is certainly a place rich with some long-standing traditions and a place at the heart of the community. “My own father worked on the construction of the refinery,” says field services crew, Giovanni (John Carbone. “Kwinana, for me, means more than a place to work. It has been a major part of my life and given my family security. It’s the young, intelligent and diverse people who are replacing my era who will keep the refinery a strong part of WA for the future.” As the refinery celebrates its 60th anniversary, that future looks in good shape, according to the management team. “Kwinana has already demonstrated its ability to deliver significant change,” says Gillen. “Concentrating now on safety, efficiency and availability will put us in good shape to secure a bright future. We’re all working together to deliver these improvements, deliver them well and set ourselves up for success, proudly fuelling WA for years to come.”
In the spotlight… Environment
Formerly a significant user of potable water in WA, Kwinana has now won awards for reducing its usage by more than 75%. Initiatives included a major project to incorporate high-quality recycled water into operations. Meanwhile, in 2014, more than 40 BP staff, contractors and family members contributed to planting 340 coastal plant species at two designated planting sites near Kwinana, as part of the BP Refinery Coastcare Conservation Programme to help build habitats for native wildlife.
Also in 2014, refinery staff collected 120 kilograms of rubbish from the refinery’s coastline as part of Clean Up Australia Day, aimed at improving the aesthetics of the coastline and removing marine debris that is potentially harmful to wildlife. Volunteers from the refinery also help at Native ARC, a local wildlife rehabilitation centre that helps sick, injured and orphaned Australian wildlife. “For the past five years, we have been helping out with projects to improve wildlife enclosures and facilities for ducklings, raptors, and quendas [bandicoots],” says Brie Jenkin, process engineer. “Recently, we helped to upgrade a joey [baby kangaroo] enclosure to give them room to move around as they get bigger. BP staff members contribute their time and the refinery contributes funding for materials.”