Years of continued investment in its capacities to boost output of high-quality gasoline and diesel have placed South Korean refineries at the pole position to service Australia’s growing demand for fuel following the recent surge of oil plant closures in the country.
According to the article on Reuters, South Korean refineries have been building up capacity for a long time and are ready to offer fuel at a small profit margin to expand market share in Australia, which positions them ahead of their peers in Japan and Singapore, as Japan has been closing ageing refineries and Singapore is unable to increase exports because international oil firms have contracted much of its fuel to ship between their own refineries.
“Korean refiners have been preparing for a long time, expecting higher demand from Australia where refineries will be shifting to import terminals,” said a source at S-Oil, who declined to be named as he was not authorized to speak to media.
Australia has been rocked by a series of refinery closures, with some of the facilities being converted into fuel terminals.
BP was the last refinery to shut down production in the country, citing competition from new mega refineries in Asia as the reason behind the closure. Prior to BP’s closure, Royal Dutch Shell, Chevron Corp’s Caltex Australia and Exxon Mobil Corp have also shut refineries in Australia over the last few years.
The string of closures of oil refineries in Australia means that by 2015 the country will have only four refineries with a combined capacity of 448,500 bpd, which is why it is expected to become the largest net importer of diesel and second-largest net importer of gasoline in Asia, importing more than half of its fuel needs.
South Korea is currently the second largest fuel supplier to Australia, lagging only behind Singapore, which supplies about half of the country imports, nearly double to the portion supplied by South Korea.