Power constraints hinder Oakajee refinery plan as WA studies new oil site

Power constraints remain one of the Oakajee industrial site's biggest hurdles as the Commonwealth explores locations for a potential new oil refinery in Western Australia, according to a regional development commission leader.

Prime Minister Anthony Albanese and WA Premier Roger Cook last week announced a $4 million pre-feasibility study to examine potential sites.

With the announcement being made in the state's mining hub of Karratha, there was some confusion about which areas were being explored for the refinery.

But WA Energy Minister Amber Jade Sanderson said the Mid West and South West were the main locations of interest.

Power investment needed

Ms Sanderson said a refinery in WA "just makes sense" and many ideal locations had already been identified.

"The feasibility study will examine all location options across WA including Oakajee, Kwinana or Kemerton," she said.

The Oakajee Strategic Industrial Area, 440 kilometres north of Perth, was designed to create a heavy industrial hub.

The site, which covers 1,330 hectares of land, sits adjacent to the ocean.

It was identified more than 20 years ago for a potential second port, but nothing has been developed

Mid West Chamber of Commerce chief executive Joanne Fabling said a lack of power supply to the region was a major hurdle to attracting new businesses.

The state government announced in 2025 it would expand the high-capacity Clean Energy Link North from Malaga to Three Springs but not the 140 kilometres further to connect Geraldton, WA's second-largest regional city.

Ms Fabling said infrastructure was deterring potential business investment and a 330KV transmission line was needed to connect the whole region.

"We have long known that the Mid West has power constraints, especially even for our existing businesses and supply," she said.

Legislation prevents private entities from controlling public property, such as power infrastructure, which Ms Fabling said created red tape around further development.

"So if someone has to go and build a 330KV transmission line from Three Springs to Oakajee, they wouldn't be able to own it if it was connecting back into the grid," she said.

"No-one [wants] to make the first move on a particular project that's probably sitting around $300 odd million to do."

Ms Fabling said she was not holding her breath when the government announced it would explore Oakajee as a site for a new oil refinery.

Analyst at the Institute for Energy, Economics and Financial Analysis, Kevin Morrison, said the Mid West's power issues would have to be addressed if the refinery came to Oakajee.

"Petrol refineries do require a lot of energy, not just electricity but also gas, largely because the crude oil has to be heated and broken down," he said.

"So that would be an additional investment for a new refinery if it's going to be located in the Mid West."

'Still dependent' on imports

Experts have started poking holes in the plan since the announcement for a study was made.

Mr Morrison said if the project got off the ground, it most likely would not change the country's reliance on imported oil.

"Geoscience Australia have assessed the commercial oil reserves; that is what makes economic sense to extract out of the ground [which] equates to only about seven months of daily consumption," he said.

"[With a WA refinery] We are still going to be dependent on importing oil, but we'll just be importing crude oil instead of oil products."

"I just think there needs to be an emphasis; it's really not going to change our energy security situation."