Australia considers building first oil refinery in 60 years

Australia said on Tuesday it would consider building its first new oil refinery in more than 60 years, as war in the Middle East squeezes supplies from overseas and underscores the urgency to improve energy security.

The federal government and the Western Australia state government will jointly spend A$4 million ($2.8 million) on a feasibility study for the refinery, a government statement said.

Australia depends on imports for about 80% of its fuel needs and has been racing to secure supplies amid the Iran war.

Most of Australia's domestic oil refineries were built during the 1950s and 1960s, but high operating costs and the emergence of large refineries across Asia forced many to shut down over the past three decades.

"This is about fuel security for the whole nation, but of course Western Australia is now left without any fuel refining capacity after the closure of the BP (facility) in Kwinana in 2021. So it's a really important initiative," Federal Resources Minister Madeleine King told ABC Radio.

Ampol's ALD.AX Queensland refinery and the Viva Energy VEA.AX facility in Victoria – both on the country's east – are the only two operational now, compared to eight in 2000.

($1 = 1.4306 Australian dollars)

-Reporting by Renju Jose in Sydney; Editing by Stephen Coates/Reuters