Australia weighs first new oil refinery in six decades

Australia's federal and Western Australian governments will jointly study the feasibility of building a new oil refinery in the country's northwest as Canberra seeks to strengthen fuel security following supply disruptions during the Iran conflict.

Prime Minister Anthony Albanese is expected to announce on July 29 that the governments will provide A$4 million (US$2.8 million) to support a feasibility study for a proposed refinery in Karratha, according to local media. The facility would be built and operated by the privately owned Perdaman Group, Bloomberg writes. 

If approved, it would be Australia's first new oil refinery to begin operations since 1965.

Australia currently has only two operating oil refineries, which supply less than one-fifth of the country's fuel demand. The nation's reliance on imported fuels was highlighted earlier this year when disruptions linked to the closure of the Strait of Hormuz triggered price spikes in April and May.

Although Australia produces some crude oil domestically, production remains limited, meaning any new refinery would still depend on imported crude supplies.

Resources Minister Madeleine King said the proposed project is aimed at strengthening the country's energy resilience. 

“This is about fuel security for the whole nation,” King said in a radio interview on July 28.

She added: “The combination of that in fuel security as well as the security of fertiliser through the Perdaman urea project here in Karratha, which the government has been behind from the very beginning, are two very important projects.”

Perdaman Group, owned by billionaire Vikas Rambal, is also developing a multibillion-dollar urea plant in Karratha that is expected to begin operations around mid-2027. The facility is designed to reduce Australia's dependence on imported fertiliser and is expected to produce up to 2.3 million metric tons annually, representing a significant share of the country's domestic demand.

By Sabina Mammadli