| Liquid fuels refining and pricing |
 |
| In 2007-08, Australia’s consumption of refined liquid fuels totalled around 50 788 million litres. Domestic production of refined liquid fuels totalled around 39 575 million litres (around 78 per cent of consumption), while imports totalled 17 982 million litres. Australian exports of refined liquid fuels were around 2169 million litres in 2007-08, equal to about 5 per cent of production. Australian consumption of refined petroleum products has increased at an average rate of 2 per cent a year over the past 10 years, driven by growth in the transport sector, which accounts for the vast majority of refined liquid consumption. |
| Production |
| The petroleum refining industry in Australia produces a wide range of petroleum products such as gasoline, diesel, aviation turbine fuel and LPG, which are derived from crude oil and condensate feedstock. In 2007-08 Australian refineries consumed 38 346 million litres of crude oil and condensate, of which imports accounted for around 68 per cent (62 per cent of Australia’s crude oil and condensate production is exported). In 2007-08, Australian refinery production increased by 2 per cent. The majority of this increase was a result of the higher production of diesel, which increased by 10 per cent in 2007-08, offsetting a 4 per cent fall in gasoline production. |
| |
| 30 |
Australian production of refined petroleum products |
|
|
|
|
ML |
ML |
ML |
ML |
ML |
|
| Automotive gasoline |
17 375 |
17 668 |
16 528 |
17 732 |
17 079 |
| Automotive diesel oil |
12 544 |
12 661 |
10 154 |
11 055 |
12 177 |
| Aviation turbine fuel |
4 964 |
5 275 |
5 216 |
5 332 |
5 182 |
| Fuel oil |
1 105 |
1 078 |
1 048 |
942 |
979 |
| Liquefied petroleum gas |
1 062 |
974 |
1 125 |
1 387 |
1 515 |
| Industrial and marine diesel fuel |
84 |
22 |
31 |
21 |
3 |
| Bitumen |
678 |
1 081 |
831 |
1 356 |
1 452 |
| Lubricants |
259 |
202 |
163 |
146 |
121 |
| Aviation gasoline |
114 |
140 |
119 |
119 |
119 |
| Heating oil |
118 |
106 |
102 |
86 |
102 |
| Other products a |
882 |
994 |
959 |
618 |
845 |
|
| Total products |
39 186 |
40 202 |
36 274 |
38 795 |
39 575 |
|
a Includes biproducts of petrochemical downstream processing.
Source: RET, Australian petroleum statistics. |
|
| Capacity |
There are seven major petroleum refineries currently operating in Australia, which are managed by four companies – BP, Caltex, Mobil and Shell. These seven refineries have a combined capacity of 42 720 million litres a year. The largest of these are BP’s Kwinana refinery in Western Australia and Caltex’s Kurnell refinery in New South Wales. An eighth refinery at Port Stanvac in South Australia ceased producing in 2003 and is currently under care and maintenance.
Fuel quality standards are progressively being increased in Australia with the aim of reducing emissions from fuel use. In 2008, gasoline standards requiring a maximum sulphur content of 50 parts per million were implemented. The diesel quality standard has been revised as of 1 January 2009 to a maximum sulphur content of 10 parts per million. Australian refineries have recently undertaken upgrades to meet these standards. |
| |
| 31 |
Australian refinery capacity |
|
|
|
|
| New South Wales |
|
|
| Clyde |
Shell |
1928 |
4 930 |
| Kurnell |
Caltex |
1956 |
7 540 |
|
| Queensland |
|
|
|
| Bulwer Island |
BP |
1965 |
5 110 |
| Lytton |
Caltex |
1965 |
6 270 |
|
| South Australia |
|
|
| Port Stanvac a |
Mobil |
1963 |
(4 520) |
|
| Victoria |
|
|
|
| Altona |
Mobil |
1949 |
4 530 |
| Geelong |
Shell |
1954 |
6 380 |
|
| Western Australia |
|
|
| Kwinana |
BP |
1955 |
7 960 |
|
| Total b |
|
|
42 720 |
|
a The Port Stanvac refinery ceased production in July 2003. b Total of currently operating refineries. MLpa Megalitres per annum.
Sources: Australian Institute of Petroleum, Downstream petroleum 2007. |
| 32 |
Fuel standards
at 1 January 2009 |
|
|
|
sulphur content (ppm) |
|
|
| Australia |
50 |
10 |
| New Zealand |
50 |
50 |
| Japan |
10 |
10 |
| Singapore |
50 |
50 |
| Malaysia |
500 |
500 |
| Thailand |
150 |
350 |
| Indonesia |
500 |
500 |
| China |
150 |
350 |
| India |
150 |
50 |
|
| Sources: Australian Institute of Petroleum, Downstream petroleum 2007, RET. |
|
| In the Asia Pacific region, many countries have also implemented stricter fuel quality standards in response to environmental concerns resulting from rapidly increasing gasoline and diesel consumption. For example, China, India and Thailand reduced maximum sulphur levels in gasoline to 150 parts per million during 2008, from more than 500 parts per million. |
| Non-conventional liquid fuels |
Coal to liquids (CTL) and gas to liquids (GTL) are two alternatives to petroleum fuels that are currently being developed in Australia. CTL is the process of converting coal, by either a hydrogenation or carbonisation process, into a liquid fuel. Coal can also be converted into a liquid fuel by first converting it into a gas (syngas) and then converting the syngas into a hydrocarbon which is processed into a liquid fuel. GTL is the process of converting either natural gas or refineries’ waste gas into liquid fuels.
Several proposed CTL projects are expected to come on line over the next few years. Linc Energy has completed construction of a five barrels a day CTL demonstration plant in Queensland. The demonstration plant will produce liquid fuel from syngas produced by an underground coal gasification process, in which coal is converted into a gas in the coal seam. Monash Energy is currently undertaking feasibility studies for a 62 000 barrels a day CTL plant in the Latrobe Valley in Victoria. The plant is planned to produce liquid fuels from low grade brown coal and would include the capture and storage of carbon dioxide emissions in geological formations in the Bass Strait. |
| |
| 33 |
Liquid biofuels production facilities in Australia |
|
|
|
ML/yr |
|
|
| Fuel ethanol |
|
|
| Manildra Group, Nowra, NSW |
180 |
Waste wheat starch,
some low grade grain |
CSR Distilleries, Sarina, QLD
(North Queensland) |
38 |
Molasses |
Dalby Biorefinery, Dalby, QLD
(started production November 2008) |
90 |
Grain sorghum |
|
| Biodiesel |
|
|
| Biodiesel Industries Australia, Maitland, NSW |
20 |
Used cooking oil, vegetable oil |
| Eco-Tech Biodiesel, Narangba, QLD |
30 |
Tallow, used cooking oil |
| Biodiesel Producers Limited, Wodonga, VIC |
60 |
Tallow, used cooking oil |
| Smorgon Fuels, Melbourne, VIC |
25 |
Tallow, used cooking oil,
vegetable oil |
|
| Sources: Media releases, company websites and direct communication with companies. |
|
Liquid biofuels, comprising fuel ethanol and biodiesel, are another alternative to petroleum fuels. There are currently three major fuel ethanol production facilities in Australia with a combined capacity of just over 300 million litres a year. These facilities produce ethanol primarily from wheat starch, wheat, grain sorghum and molasses.
There are four major biodiesel production facilities in Australia, with additional facilities producing small quantities. Total biodiesel production is approaching 100 million litres a year. Biodiesel facilities in Australia use a range of vegetable oils and animal fats as feedstocks, which are selected according to price and availability. The limited availability of low priced feedstocks has been a constraining factor for the expansion of the Australian biofuels industry. |
| Prices |
The pre-tax component of Australian gasoline prices remains among the lowest in the OECD and the tax-inclusive gasoline price is the fourth lowest, following the United States and Canada.
Australian wholesale gasoline and diesel prices closely follow movements in Singapore prices, as Singapore is the major competitor for these products in the Australian market. Around 60 per cent of Australia’s imports of refined petroleum products are sourced from Singapore. In 2007-08 the Singapore gasoline spot price increased by 16 per cent (in real terms) to average A$0.72 a litre. This was a more subdued increase than that in the World Trade Weighted average price of crude oil, which increased by 30 per cent in 2007-08. |
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