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Contracts & Tenders, Industry News, Latest News, Northern Territory

Contractor selected to build $1.2B fuel refinery

Darwin Clean Fuels has signed a Memorandum of Understanding with a US-based technology, engineering and construction company to build a $1.2 billion fuel processing plant.

McDermott will undertake a feasibility study and be the lead engineering, procurement and construction contractor for the facility, which will produce up to 100,000 barrels of transport fuels per day.

The project is expected to create up to 400 jobs during construction, 140 jobs during operation and inject $360 million per year into the Northern Territory’s economy.

“The refinery would leverage our proprietary technologies, including alkylation and sulphur recovery, and is evidence of McDermott’s technology-led EPC capabilities,” said Ian Prescott, McDermott’s Senior Vice President of Asia Pacific.

“Our engineering feasibility studies often serve as the essential underpinning of client decisions about moving forward with major investments.”

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The plant will produce condensate, a light petroleum liquid that condenses from natural gas that requires less processing to create transport fuels.

Darwin Clean Fuels plans to design, build and operate the condensate plant, which aims to have 75 per cent lower carbon dioxide emissions than a crude oil refinery.

“Darwin Clean Fuels looks forward to the next phase of the project with McDermott to move it toward a final investment decision,” said Tony Debenham, Darwin Clean Fuels Managing Director.

“The Clean Fuels Condensate Refinery is a great, long-term investment in Australia, creating jobs and contributing to the economy by reducing the reliance on fuel imports.

“It also creates an opportunity to maximise both the output and use of this great resource by refining condensate onshore in Australia rather than exporting it overseas for processing it into petrochemicals or refinery blendstock, helping to address the long-term fuel security issues that Australia faces.”

Debenham said Australia currently consumes in excess of 1,000,000 barrels of transport fuels per day and imports 600,000 barrels per day to meet its transport fuel needs. He adds that by 2030, Australia is forecast to produce in excess of 300,000 barrels of condensate the bulk of which is currently exported.

“The Darwin Clean Fuels plant will contribute to greater fuel security not only in the NT but also to Australia,” he said.

Early phase engineering work has begun and is expected to finish by the end of the first quarter in 2020. Construction is expected to commence in 2021, with operations to start in 2023.

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