BP eyes rail for expected South Australia boom

Largs North terminal to be expanded with rail gantry to ease reliance on road

By Rob McKay | April 15, 2011

BP says it is looking to rail to add distribution efficiencies in South Australia.

The energy supermajor is to expand its Largs North terminal with the state’s resources boom in mind.

BP will spend $20 million on its Adelaide expansion and work has already begun on the design of two additional 30 million litre storage tanks.

Construction due to start in the second half of the year.

At the same time, a rail gantry will be built within the terminal.

"As the South Australia mining and transport markets continue to grow, rail movement of fuel offers a reduction in the number of truck movements and an improvement in the efficiency and safety of transporting large volumes of fuel around the state," the company says.

It will also present the company with a modal option, according to a company spokesman.

"There are two drivers in our plans to expand the Largs North terminal," the spokesman says.

‘The first is growing demand from all sectors in SA – retail, commercial and mining.

"We want to be able to capture as much of that increased demand as possible – so, we are likely to need more product.

"The second driver is the need to be able to demonstrate to commercial customers that we can maintain supply.

"So, having more product in the terminal is a good start and having the capacity – should it be required - to handle bigger parcels of product ex Asia is also helpful.

"But having it in the terminal is one thing – getting it to customers is another thing.

"So, having the capacity to move by both road and rail -as we can do out of our Kewdale terminal in Perth - gives us options and should give customers additional confidence in our ability to supply.

"Also if you’re moving really large volumes, then train offers many advantages."

He would not be drawn immediately on any risks increasing reliance on rail might pose, given its infrastructure’s exposure to weather-related incidents and long-term underinvestment in upkeep and modernisation, saying that the company has "the next 20 months or so to work through issues like that".

BP’s Largs North terminal is already the largest storage facility in the region, and when complete the new tanks will double BP’s diesel storage capacity.

The increased capacity will also provide options to bring in product via the shipping patterns from BP’s Kwinana refinery in Western Australia and, should the need arise, allow larger imports from Asia, adding to the flexibility of BP’s supply capability, it says.

"The new tanks, combined with the new rail loading gantry will provide flexibility and additional supply security to our customers in South Australia," BP Australasia President Paul Waterman says

"This announcement follows the recent award of four exploration blocks offshore South Australia which will see BP investing $1.4 billion in seismic and drilling activity over the next six years."

The new facility was just one of many being developed by BP and is part of an investment program in new and up-graded terminals in Western Australia, New South Wales and Queensland.

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