By Jaime Llinares Taboada

BP PLC said Friday that it will cease producing fuels at its Kwimana refinery in Western Australia as the operation is no longer economically viable, and that it plans to convert it into an import terminal.

The FTSE 100 oil major said a higher number of large-scale refineries in Asia and the Middle East have disrupted the Australian market, causing regional oversupply and sustained low margins. Kwimana has the capacity to produce 152,000 barrels a day.

BP added that the closure is aligned with its strategy to focus on high-grade refining. The company intends to reduce refining production to 1.5 million barrels by 2025 from the current 1.7 million.

Refining activities at Kwimana will wind down over the next six months, the company said. Construction works for the new terminal are expected until 2022. Once completed, the site is expected to support 60 jobs--compared with the current 650 workforce.

BP said it is also exploring future options for Kwimana, including a clean energy hub that could produce and store low carbon fuels.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

October 30, 2020 06:19 ET (10:19 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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