Australian operator inks deal for proposed condensate refinery

Darwin Clean Fuels Pty. Ltd. (DCF) has signed a memorandum of understanding with McDermott International Inc. for the service provider to act as exclusive contractor on a proposed clean-fuels condensate processing plant in Darwin, Northern Territory, Australia.

Under the MOU—to be finalized after a final investment decision is reached—McDermott will deliver the feasibility study, technology, front-end engineering design, and engineering, procurement, and construction services for the plant, which would process 60,000-100,000 b/d of Australian condensate, McDermott said.

The refinery also would be equipped with McDermott’s proprietary technologies, including alkylation and sulfur recovery, said Ian Prescott, McDermott’s senior vice-president of Asia Pacific.

As part of the initial contract, McDermott will undertake the feasibility study and FEED through to FID. Upon FID, the service provider said it will act as lead EPC contractor for the refinery.

Early phase engineering work is scheduled to begin immediately and be completed by first-quarter 2020.

Australia—which consumes some 1 million b/d of transport fuels and currently imports 600,000 b/d to meet its transportation fuel needs—is a major condensate producer, with the country forecast to export 260,000 b/d by 2020 and up to 305,000 b/d by 2030, according to McDermott.

Alongside helping to reduce Australia’s reliance on fuel imports, the proposed condensate refinery also intends to maximize the output and use of the country’s production by refining condensate onshore Australia rather than exporting it overseas for processing into petrochemicals or refinery blendstock, helping to address long-term fuel security issues that Australia faces, said Tony Debenham, managing director of DCF.

If approved, the proposed plant will be the first major petroleum refinery to be built in Australia in more than 45 years and the first in Australasia to be using entirely condensate as its feedstock.

DCF aims to take advantage of the low-sulfur, high-quality condensate feedstock for processing into transport fuels that meet stringent Australian clean-fuel standards introduced in 2008-09 as well as Euro 6-quality standards mandated for 2027.

In strategic alliance with BP PLC, DCF said it intends to replace fuel imports into the Northern Territory and gasoline imports to Australian east coast markets.