In Queensland, as the demand for oil increases, a small refinery in the outback has emerged as a crucial player in the exploration process, with plans for expansion now being considered.

The Inland Oil Refinery, located in Eromanga, has been operational for over four decades, primarily producing limited quantities of underground mining fuel for the mining industry. With the recent developments in the Taroom Trough oil field, both the refinery and its suppliers are optimistic about potential growth.

Situated around 1,000 kilometers west of Brisbane, the Inland Oil Refinery has been a fixture in Eromanga since 1986, but it is now on the brink of expansion as the Queensland government accelerates oil project initiatives. The refinery is significantly smaller than the country’s two largest refineries, with a production capacity of only 1,250 barrels per day, which is approximately 80 times less than Ampol’s facility in Brisbane.

Over the years, the refinery has processed crude oil sourced from the nearby Cooper-Eromanga basin and South Australian oil fields, producing diesel and solvents for both the mining sector and local residents. Despite its limited scale, industry experts recognize the refinery’s importance as Queensland prepares to ramp up oil production in the Taroom Trough.

The Taroom Trough, a 750-square-kilometer region in southern Queensland, has recently received state government approval for new oil and gas exploration. This decision has elicited mixed reactions, with industry stakeholders welcoming it, while environmental groups have raised concerns regarding groundwater contamination, water usage, and emissions from fossil fuels.

Drew Morland, the chief executive of IOR, indicated that the refinery’s production capacity has been primarily constrained by supply, but the opening of the Taroom Trough presents new opportunities for growth. “The Taroom Trough represents a significant emerging opportunity, and if production levels from that area increase as expected, it is certainly worth considering how we can expand our processing capacity,” Morland stated. He emphasized the refinery’s role in supporting local communities and enhancing Australia’s fuel security.

Omega TN Pty Ltd, an Australian company selected for operations in the Taroom Trough, has been utilizing IOR during its testing phase. Trevor Brown, CEO of Omega Oil and Gas, mentioned that during testing, their production has been limited to 1,000 barrels per day, which IOR can accommodate. He expressed optimism about future production levels and the potential for expansion discussions with the Eromanga refinery.

Christian Lange, CEO of Bridgeport Energy, which operates in western Queensland, underscored the importance of increasing production to ensure a steady supply to IOR. “The IOR is strategically vital as it provides nearly all of its diesel to the mining industry, which is fundamental to the nation’s economy,” he noted.

According to IOR, the Eromanga facility mainly produces low-emission diesel needed for underground mining operations in regional New South Wales, along with solvents for Australia’s chemical manufacturing sector. Peter Knights, a professor at the UQ School of Mining Engineering, highlighted that securing fuel supply from domestic sources is crucial for the mining industry, especially during crises. “Having reliable fuel sources is essential; without it, operations come to a halt,” he explained.

IOR also supplies a small quantity of on-road diesel for the local community. Morland stated, “Given our location, refining oil here is far more practical and less emissions-intensive than transporting it 1,000 kilometers to Brisbane for refining and then bringing it back.”

Dale Last, Queensland’s Minister for Natural Resources and Mines, affirmed that the government is collaborating with the industry to develop the necessary infrastructure for oil production. “We will continue to engage with resource companies regarding infrastructure needs to bring this oil to market, including the possibility of constructing a new refinery in Queensland if necessary,” Last said.