Oil and gas giant BP will close its 65-year-old Kwinana refinery in Western Australia, leaving hundreds of employees out of work.

The British multinational says regional oversupply and low margins mean the refinery, south of Perth, is no longer viable.

There are currently 400 permanent staff and 250 contractors employed at the facility, which will be converted to an import terminal.

BP says the continued growth of large-scale refineries throughout Asia and the Middle East has structurally changed the market.

“Generations of Western Australians have worked at the facility, building a fantastic legacy of safe and reliable operations that we will always be proud of,” BP Australia head of country Frederic Baudry said in a statement on Friday.

“Today’s decision to cease refining is a difficult one and not in any way a result of local policy settings.”

Refining activities will wind down over the next six months and construction of the new terminal will continue through to 2022.

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The new import terminal will support just 60 jobs.

“We deeply regret the job losses that will result and will do everything we can to support our people through the transition,” Mr Baudry said.

WA Premier Mark McGowan said BP must honour its commitment to help workers find new jobs in the sector.

“This is an extremely disappointing outcome, and our primary concerns are the welfare of the dedicated workers at the Kwinana refinery and the continuation of fuel supply to WA,” he said in a statement.

“The state government has repeatedly called on BP to continue its operations at the refinery, but the company has made this decision for commercial reasons after years of significant financial losses.”

Australian Manufacturing Workers Union state secretary Steve McCartney said he feared the workers would be forced into fly-in, fly-out jobs.

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“Many AMWU members who work in Kwinana do so because they can work in a critical job that literally fuels the economy, and still be home every night with their families,” he said.

“Five months, including a Christmas period, is not long enough to substantively retrain workers. BP needs to step up and show us what they’re going to do for these workers and for the contractors who provide maintenance and services.”

In a statement, federal Energy Minister Angus Taylor said the Morrison government was deeply disappointed by the decision to close the refinery.

“As BP has made clear, its decision to close the refinery was based on commercial and international factors, including the age of the refinery and overseas competition,” he said.

“Closure of the refinery will not negatively impact Australian fuel supplies.”

AAP

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