BP has halted its plans to convert its disused Kwinana oil refinery in Perth, Australia into a biofuels plant, the UK energy major told S&P Global Commodity Insights Feb. 4 in a statement.
"While bioenergy remains a core part of BP's strategy, BP has decided to rephase the Kwinana Renewable Fuels project (KRF)," a BP spokesperson said.
"This involves adjusting the pace of delivery of KRF with a focus on improving capital efficiency and better alignment with government policies."
The decision came just months after the company had received approval from the Western Australian government to convert Kwinana into a renewable energy hub as part of a $386 million investment.
The Kwinana refinery, which was once Australia's largest oil refiner with a capacity of 146,000 b/d, was converted into a fuel import terminal in 2021 amid low refining margins and regional oversupply.
BP subsequently planned to transition the 250-hectare Kwinana Industrial Area site into an energy hub that will produce and supply renewable fuels and energy products, including the KRF biofuel plant and a green hydrogen plant called H2Kwinana.
Commodity Insights understand that the fate of the H2Kwinana project is dependent on Australia's $2.48 billion (A$4 billion) Hydrogen Headstart program, which the project is shortlisted for funding under.
When asked about the H2Kwinana project's timeline, BP did not comment.
"Over the last three years we have made significant progress to develop bp's renewable fuels and hydrogen projects at our Kwinana Energy Hub," the spokesperson added.
The Kwinana biorefinery was expected to start operating in 2026-27 on a 10-hectare portion of the site, with some existing infrastructure repurposed, including hydrofining units and storage tanks.
The project was expected to focus on producing sustainable aviation fuel and hydrotreated vegetable oil from renewable sources, leveraging both domestic and imported feedstocks, such as canola oil.
Biorefining slows
BP had in July 2024 said it will concentrate its expansion into the biofuels segment on upstream feedstock solutions instead of biorefining and had acquired Brazilian ethanol producer Bunge Bioenergia to shield the company from margin weakness plaguing the biofuels sector.
This came after stalling margins had triggered investment uncertainty in Europe's biofuels downstream segment, Commodity Insights reported previously.
In June 2024, BP had paused plans to construct a standalone biofuel production unit at its Lingen refinery in Germany, and added that projects in Rotterdam and Castellon, Spain were under evaluation.
Back then, the company was also reassessing the Kwinana project in Australia, although the company had expressed confidence in these projects then, citing their "prime locations" for growing Sustainable Aviation Fuel demand.
