bp innovation leading to transformation and decarbonisation
Energy company bp – tied to the industrial history of the State through its Kwinana oil refinery – has taken another step toward realising its ambitious plan to reimagine energy for WA.
The bp oil refinery, established in 1955, was the first industrial facility in the now Kwinana Industrial Area.
But a decision was taken in late 2020 to close the refinery and convert it into an import terminal.
With bp looking to transform its business globally from an international oil company to an integrated energy company and be net zero in its operations and products by 2050, the bp site is now likely to be the home of an integrated energy hub.
Under the bp plan, it would leverage the infrastructure operating today for the import and supply of fuel products and build new assets for clean energy production such as biofuels and green hydrogen in support of net zero.
bp has completed a concept development phase study into its proposed energy hub H2Kwinana and is a step closer to achieving a final investment decision on the project.
bp Manager Kwinana Energy Hub Michael Glenny presented an overview of the operations at the recent Kwinana Major Projects Conference.
The green hydrogen project is seen as key to decarbonising bp's biorefinery and other industrial facilities in Kwinana.
“bp has safely handled and supplied hydrogen for decades,” Mr Glenny said. “During oil refining, hydrogen was a by-product and was captured and supplied via a hydrogen pipeline that extends through much of the Kwinana Industrial Area. While no longer in operation, that pipeline remains in existence and is one of the key advantages of H2Kwinana.”
Kwinana is one of three energy hubs being developed in WA. bp took operatorship of the Australian Renewable Energy Hub in the Pilbara in 2022 – which has potential to be one of the largest renewable energy hubs in the world – and its Mid West project, Geraldton Export-Scale Renewable Investment (GERI), has plans for about 10GW of wind and solar power generation to support green hydrogen production and H2Kwinana.
“At a time when so many businesses, organisations and governments have set targets for decarbonisation, we feel we’re contributing to important work, including through the State Government’s Global Advanced Industries Hub and the Kwinana Industry Council’s Carbon Reduction Plan,” Mr Glenny said.
“Our import terminal has reliably operated since the safe closure of the oil refinery in 2021 and we’re underway with projects that will optimise our terminal and set us up for the proposed biofuels production.
“bp’s Energy Outlook published in July this year predicts global oil demand will plateau over the next 10 years or so, before declining, driven in part by the falling use of oil in road transport.
“This reflects the expected increase in vehicle efficiency and the increasing number of vehicles fuelled by alternative energy sources (like biofuels or electrification).
“We are and will continue to supply hydrocarbon fuels during and in support of the energy transition.
“We take this responsibility to continue to fuel our customers and communities seriously, as well as our role in delivering to the market lower carbon energy solutions.
“Biofuels are liquid fuels produced from renewable and organic feedstocks that can be used in existing engines to produce lower carbon fuel products.
“Biofuels are not new, in fact bp was exploring co-processing at the Kwinana site, where we would see some bio feedstocks used in diesel production, while we were operating as an oil refinery.
“At Kwinana our planned biorefinery will flexibly produce about 10,000 barrels a day of Sustainable Aviation Fuel or SAF and Hydrogenated Vegetable Oil or HVO, which is renewable diesel.”
With the global aviation industry being expected to double to more than 8 billion passengers by 2050, Mr Glenny said Sustainable Aviation Fuel was a “critical decarbonisation solution”.
bp formed a partnership with Qantas in 2021 to reduce carbon emissions in the aviation sector and contribute to the Sustainable Aviation Fuel industry.
“These biofuels are currently the most viable decarbonisation solution for the mining, heavy transport and aviation sectors in the short to medium term and deliver about an 80 per cent reduction in carbon when compared with fossil fuels,” he said.
“Currently, Australian diesel demand is about 30 billion litres a year – covering road, agriculture, and industrial needs. There is a huge opportunity to replace some of this consumption with a renewable product and see a considerable reduction in carbon emissions from fuel consumption.”
bp is partnering with BHP on a trial to use a renewable and hydrocarbon blend to reduce carbon emissions from its Yandi iron ore operations in the Pilbara.
“That trial looked at blends between 20 per cent and 50 per cent and for a miner like BHP, where about 40 per cent of operational greenhouse gas emissions come from diesel fuel, you can see the potential that biofuels could deliver towards decarbonisation,” Mr Glenny said.
bp is speaking at the Energy Club WA October Industry Dinner. Tickets are now on sale and can be purchased here.