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Coal to liquids? 

October 2001. A multi-billion-dollar resources project to convert coal to liquefied gas and diesel fuel as well as build a 1000-megawatt power generator is being considered by investors for the Latrobe Valley brown coal reserves. Costing more than $1 billion, the consortium is working with scientific advisers so that the plant avoids releasing carbon dioxide emissions, instead working out ways for emissions to be pumped into nearby underground reservoirs where a portion of the carbon dioxide reacts with its environment to form limestone.

Coal reserves in the region amounted to 160,000 million tonnes and the current operations used just 65 million tonnes.

The industry in Victoria

The components of the industry are; The Altona petrochemical complex producing polyolefins, synthetic rubber and PVC (from imported VCM by Australian Vinyls). The complex is largely owned by Qenos, the former Kemcor Australia and its JV in polyethylene resins with Orica; Australian Vinyls PVC plant using imported VCM at Laverton; Huntsman Chemical styrene and styrene polymers plant using imported benzene at West Footscray; Basell's polypropylene plant at the Shell Refinery at Geelong; Albright and Wilson Australia producing inorganic phosphates at Yarraville. Small scale activities including:

Pesticide chemicals

Formaldehyde adhesive by Orica,
bulletMethanol synthesis at pilot scale by BHP Petroleum (with Orica Katalco of the UK) Wyndham 20 km west of Melbourne, Victoria. This project is being acquired by a joint venture of Coogee Chemicals (80%) and Australian Submarine Corporation.
bulletNufarm - 2,4-D, trifluralin and metham sodium at Laverton. (Produces about 6 000 tonnes of chlorine to produce 2,4-D and trifluralin herbicides.)

bullet Monsanto - glyphosate herbicide at West Footscray (exclusively distributed through Nufarm since May 2002 valued at A$100m pa.

bulletSymex Holdings fatty acids (20 000 tonnes) and glycerol at Port Melbourne.


Orica producing 14 000 tonnes of chlorine including for use for the manufacture of Cereclor (chlorinated polyethylene use as fire resistant electrical insulation) at Yaraville, near Melbourne.

VSP Industries. The facility has produced a wide range of chemical products including alkyds, polyesters, esters, defoamers, plasticisers, acrylic emulsions, epoxies, polyamides, acrylic and vinyl acrylic latices, paper chemicals, customer specified blends and specialty barrier coatings and other chemicals. Available for acquisition.

Many formulators of paints, adhesives, cleaning chemicals, pesticides etc including Rohm and Haas at Point Henry (acrylic emulsions) and Gibson Chemicals.


Melbourne and Geelong region.
Press on name/region for more information

Key Products

Fatty acids
Symex Holdings
Symex Holdings
Methanol Coogee and ASC
Albright and Wilson
Basell Australia
Propylene oxide polyols
Dow Chemical
Phenol (and acetone) and phenolic resins
Huntsman Chemicals
PVC resin
Australian Vinyls Corp
SBR and BR synthetic rubbers
Styrene polymers and copolymers
Dow Chemical
Styrene, styrene polymers and copolymers
Huntsman Chemicals
During 1999, Incitec and BHP Petroleum undertook a $15m feasibility study to produce 450 000 tonnes of ammonia to be used to produce 730 000 tpa of urea. To cost A$500m (plus A$200m for pipelines) with production feasible by 2002. It would require 50 tj/d of gas and planned to be located at Geelong using the Minerva offshore gas shelf in south-western Victoria (Lara). In February 2000, BHP announced it was seeking another partner. Since then the project appears to have been cancelled.

A chloralkali-based petrochemical complex was evaluated by ICI in the 1970s for Point Wilson and there have been substantial expansion plans at the Altona complex to utilise ethane reserves to increase production of polyethylene resins. For the last two decades however, expansion has largely been capped by growth in the Australian market with closures of smaller high cost operations.

Victoria's petrochemical industry developed during Australia's protectionist era and the reduction of tariffs from around 60 per cent up to the 1960s, to 5 per cent today promoted extensive industry rationalisation and closures. The core of the industry has remained after extensive efficiency improving measures including the shedding of labour - typically one-third for larger operations. Nevertheless inadequate scale and lack of comparative advantage serves to continue to constrain its outlook. The great irony is though established under high import tariffs, the petrochemical industry at Altona would today have been more export-oriented in their absence. Tariffs underpinned weaker competing operations. The Bass Strait gas provided for cheap petrol and supernormal profits (100 per cent returns on shareholders funds for one major operator) but not one significant industry can today be attributed to it. That status is not predicted to change without subsidies and the status today a monument to inept policies.

Trade profile for chemicals (ex TradeData)

See also national chemical industry and trade performance.
A state by state comparison (five digit resolution available on request) . bulletWestern Australia bulletSouth Australia bulletNew South Wales bulletQueensland

Oil and Gas
Though oil production is declining to 300 000 barrels per day at projected demand, gas will be available for another three decades.

Gas from Bass Strait contains around 400 000 to 500 000 tonnes of ethane per year of which only around 200 000 tonnes is extracted for use by the Altona (and West Footscray) complex.

 Bass Strait (Gippsland Basin) crude oil and gas (owned by BHP and Esso) is brought ashore by pipeline to a treatment and separation plant owned by Esso at Longford, Victoria (subject to an explosion in September 1998). The plant produces; bullet Sales gas - principally methane gas with some ethane. It is distributed from Dandenong for domestic and industrial use. Capacity is 990 Tj/day. bullet Stabilised crude oil is transferred to the Westernport harbour for shipping and pipeline distribution to the refineries at Altona and Geelong. bullet Intermediate mixture of ethane, propane and butane transferred by pipeline to Westernport for a fractionation process. At Westernport the ethane gas is separated from the propane and butane and transferred by pipeline to the petrochemical operations at Altona and West Footscray. BHP is proposing a $383 million pipeline to transport Gippsland Basin gas from Longford to the Sydney gas system at Wilton, south west of Sydney.

There is also a 151 km line from Wagga in New South Wales to Barnawatha, near Wodonga in Victoria supplying up to 90Tj/day for Victoria's gas grid.
Port Campbell gas capable of supplying to100 Tj/day

The Esso/BHP monopoly is being challenged by another partnership in which Esso/BHP have a 50 per cent equity. The other partners are Shell Australia, Australian Worldwide Energy, News Corporation and Petroz with which they have an interest in the Kipper field and who, with Gulf Oil have an interest in Manta and Gummy fields. Kipper is needed to economically develop the Manta and Gummy fields. Esso/BHP reluctant to lose their monopoly position and there is interest in buying them out of Kipper. These three fields would lead to a processing plant at Orbost, north east of Longoford that could supply 30 per cent of Victoria's gas needs (at a cost of $700m). (It is worth noting that an explosion at Longford in August 1998 totally disrupted gas supplies in Victoria.).

Bass Strait oil reserves are about 87 per cent depleted (2001) but identified gas reserves are less than 50 per cent used.   bullet Historical relevance.


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Regional Map Click on the name of the region or State for information.
Under development.
Map of Australia showing described regions
Regions of Victoria on map
AltonaMelbourneSale (Bass Strait)
Other information about Victoria
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Chemlink Pty Ltd ACN 007 034 022. Publications 1997. All contents Copyright © 1997. All rights reserved. Information in this document is subject to change without notice. Products and companies referred to are trademarks or registered trademarks of their respective companies or mark holders. URL:

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