Shell’s decision to shut down a Sydney refinery could cost 2200 jobs and threaten the reliability of oil supplies in NSW, a union says.
Shell has announced it will convert the Clyde Refinery and Gore Bay Terminal in Sydney into a fuel import facility by mid-2013.
The oil giant said on Wednesday the 75,000 barrel-per-day refinery could not match its Asian competitors and the company would turn to importing petroleum products into Sydney.
The Australian Manufacturing Workers Union (AMWU) NSW secretary Tim Ayres said the decision rang the death knell for the historic refinery.
“The Clyde oil refinery has been an important part of Sydney’s industrial and manufacturing infrastructure for 100 years,” he said on Wednesday.
“This is a very disappointing outcome for many hundreds of workers and the facility.”
The AMWU claims 500 direct jobs are at stake, while a further 1700 could be lost in downstream industries like petrochemicals and plastics if the historic refinery is shut.
Shell vice-president Australia downstream Andrew Smith said the news would be very difficult for many employees and Shell was committed to supporting them through the transition.
“While this is a sad day for Shell’s operations in New South Wales and many of our employees at the refinery, the decision to convert Clyde into a terminal is consistent with Shell’s strategy to focus its refining portfolio on larger assets,” he said.
In an independent report due for release soon, the AMWU and the Construction, Forestry, Mining and Energy Union (CFMEU) claim that closing the Clyde refinery could have “profound implications” for oil security and reliability for NSW.
With Clyde ending operations, the only refinery left in the state is a Caltex facility at Kurnell.
Mr Ayres said it was time for the NSW government to seek assurances from Shell about the potential impacts of the closure, such as in reducing competition, raising prices and disrupting oil supply in NSW.
“If I was in (Premier) Barry O’Farrell’s shoes, I’d really want to be assured that we’ve got certainty over fuel supply,” he said.
“We really think it’s a big test for the NSW government,” he said.
“They should be rolling up their sleeves, getting engaged with Shell and with industry, and making sure we’ve got a viable future for that site.”
He said the independent “report points to a very different future” for the plant and Shell should be engaging with the unions on an alternative plan.
Shell said the decision about Clyde was not related to Shell’s Geelong Refinery and had not been reached because of government policies, including any proposed price on carbon.
Comment is being sought from NSW Minister for Resources and Energy Chris Hartcher.
