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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 components of the industry are;
Pesticide chemicals
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.
Coal to liquids?
The industry in Victoria
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:
Formaldehyde adhesive by Orica, 
Methanol 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.Nufarm - 2,4-D,
trifluralin and metham sodium at Laverton. (Produces about 6 000 tonnes
of chlorine to produce 2,4-D and trifluralin herbicides.)
Monsanto -
glyphosate herbicide at West Footscray (exclusively distributed through
Nufarm since May 2002 valued at A$100m pa.
Symex Holdings fatty acids (20 000 tonnes) and glycerol
at Port Melbourne.
Many formulators of paints, adhesives, cleaning chemicals, pesticides etc including Rohm and Haas at Point Henry (acrylic emulsions) and Gibson Chemicals.
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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.
See also national chemical
industry
and trade performance.
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;
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.
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.
Sales gas - principally methane gas with some ethane. It is distributed
from Dandenong for domestic and industrial use. Capacity is 990 Tj/day.
Stabilised crude oil is transferred to the Westernport harbour for shipping
and pipeline distribution to the refineries at Altona and Geelong.
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.
Port Campbell gas capable of supplying to100 Tj/day
Historical relevance.
Regions of Victoria on map
AltonaMelbourneSale
(Bass Strait)
Other information
about Victoria