Caltex announced on Thursday that after a review, it has decided to shutter its Kurnell refinery in Sydney. The closure of the 57-year-old facility by mid-2014 would cause the loss of over 300 jobs.

The closure is part of Caltex's restructuring plans, which includes reduction of the firm's workforce to just about 100 from 430. The review, began in May, also decided to use the Kurnell facility as a transport fuel import hub instead.

"Caltex refineries are relatively small and, in their current configuration, are disadvantaged when compared to the modern, large scale, more efficient refineries in the Asian region against which we compete," Caltex Managing Director and CEO Julian Segal said in a statement.

Caltex is also conducting a review of its refinery operations for the oil firm's second facility in Brisbane. The review started in August 2011. Caltex provides about one-third of Australia's refined petrol supply.

The Australian Workers Union (AWU) said it will contact Caltex to confirm the report of Kurnell's closure. AWU said it was aware of the shutter option but complained that Caltex's consultation with the union was very limited. AWU, which has scheduled a noon press conference, said up to 800 jobs are at risk with the Kurnell closure.

Caltex insisted its decision is not linked to the carbon tax.

"Combined with the challenging business environment, including the ongoing strength of the Australian dollar, increased operating costs and a lower Caltex Refiner Margin, has meant that Caltex's refineries have been generating significant losses which, without intervention, are expected to continue in the future," Mr Segal explained.

He also announced that Caltex inked an agreement with Chevron for the procurement of petrol, diesel and jet fuel with associated shipping services to ensure a reliable and efficient supply of import transport fuels.

"Embarking on this restructure will ensure the continued success of the company by building on our supply chain and marketing operations, while at the same time stemming losses from the company's refineries," Mr Segal said.

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