Shell Australia says it plans to convert its Clyde Refinery and Gore Bay Terminal in Sydney Australia into a fuel import terminal.

The Australian arm of Royal Dutch Shell PLC said Tuesday if this proposal is accepted by the relevant Shell Australia boards, it would see the end to refining operations at the site, with Clyde converted to a competitive fuel import terminal, well located to supply the New South Wales market and the growing western suburbs of Sydney.

The proposal recognises the 75,000 barrel per day Clyde Refinery is no longer competitive against new mega-refineries in the region – and requires significant investment including a maintenance turnaround scheduled for mid 2013.

According to the company, employees at Clyde and Gore Bay have been informed of the proposal and a period of consultation with them and their representatives will be undertaken before a decision is made on the proposal.

“The proposal to convert Clyde into a terminal is consistent with Shell’s strategy to focus its refining portfolio on larger integrated assets, and to build a profitable downstream business here in Australia,” said Shell vice-president, Andrew Smith.

“Shell acknowledges the valuable contribution made by local employees in servicing the New South Wales market for more than 100 years. We commit to a timely consultation process and to providing support to our employees during this period,” added Mr Smith.

More from IBT Markets:
Newsletter: To receive Global Markets update, sign up here