Exxon to close Australian refinery

FILE PHOTO: A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018. REUTERS/Sergio Moraes

(Reuters) - Exxon Mobil Corp said on Wednesday it will close its 72-year-old Altona refinery in Australia, the country’s smallest, and convert it to a fuel import terminal as refiners struggle with low demand.

The decision by the U.S. oil major will leave Australia with only two refineries, after BP Plc decided to shut its Kwinana facility by April. Ampol Ltd is still reviewing the future of its Lytton refinery.

“ExxonMobil’s decision to close its Altona refinery in Victoria is extremely disappointing,” said Angus Taylor, the Australian minister for energy and emissions reduction, in a statement.

Global lockdowns and curbs on international travel due to the coronavirus pandemic has cut demand, leaving refiners grappling with losses. Exxon said it took the decision because it was no longer economically viable to continue the refinery.

Australia had offered a A$2.3 billion ($1.8 billion) fuel security package to tide over the financial hit facing refineries. Only Viva Energy, operator of what will be Australia’s largest remaining refinery as of April, accepted.

Taylor said the closure of Exxon’s refinery would not negatively impact Australian fuel stockholdings. The Altona plant employs around 300 people.

($1 = 1.2922 Australian dollars)

Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Ramakrishnan M. And Stephen Coates