(Jay Carstens’s post from the ABC NEWS AUS on 11April 2026.)
Expansion
on cards at Eromanga refinery as Queensland looks to produce more oil: As
Queensland looks for more oil, a small outback refinery has proven critical for
the exploration process and now expansion is on the cards.
The
Inland Oil Refinery has operated in Eromanga for more than 40 years, creating
small amounts of underground mining fuel that is sold to the mining sector. The
refinery and its supplier say expansion is a genuine possibility as the Taroom
Trough oil field opens up.
In the outback town of Eromanga, about 1,000 kilometres west of Brisbane, lies a small and relatively unknown oil refinery. Inland Oil Refinery (IOR) has operated in the south-west town since 1986, but now could be on the cusp of expansion as the Queensland government pushes to speed up oil projects.
The
site is significantly smaller than the nation's two main refineries, only
producing up to 1,250 barrels a day — around 80 times less than Ampol's
Brisbane facility. Since 1986, the refinery has sourced crude oil from the
neighbouring Cooper-Eromanga basin and the South Australian oil fields to
produce solvents and diesel for mining as well as the local community.
Despite
its small scale, oil producers and mining industry experts say the refinery is
a critical piece of infrastructure as Queensland gears up to increase oil
projects in the Taroom Trough. Eromanga is 1,000 kilometres west of Brisbane.
Why is it important?
The
Taroom Trough is a 750-square-kilometre site in southern Queensland recently
approved by the state government for new oil and gas exploration. It is a move
praised by industry but slammed by environmental groups over concerns about
groundwater quality, water consumption and fossil fuel emissions.
IOR
chief executive Drew Morland said the Eromanga facility's output was mainly
restricted by supply, with the Taroom Trough now opening the door to expansion.
"The Taroom Trough is a significant emerging prospect, and if production
volumes from that region grow in the way being anticipated, then it is
absolutely appropriate that we consider what expanded processing capacity could
look like," Mr Morland said.
"I
can say broadly that IOR views increased production in western Queensland as a
genuine opportunity, for producers, for our refinery, for the local
communities, and for Australia's fuel security more broadly. Our customers
consistently tell us they could take more of our product if we could produce
more. There is genuine demand. What we need is more oil."
Future expansion
Australian
company Omega TN Pty Ltd, one of the preferred tenders for Taroom Trough
operations, has been using IOR during its testing process. "During the
testing phase, we're only producing up to 1,000 barrels a day which means that
we can process … [that oil] through the Eromanga refinery," Omega Oil and
Gas chief executive Trevor Brown said.
"So
that's been really valuable and will be valuable during this testing phase. When
we get up to pilot programs and extended production tests, the rate of
production may be larger than the capacity of the refinery to take."
Mr
Brown said he was in talks with the Eromanga refinery about the scope for
future expansion. "I think there would be a very strong investment case …
and we'll be having discussions with them over the next several months."
Bridgeport
Energy produces oil in western Queensland, including operations in the
Cooper-Eromanga basin further west of Eromanga. "I think we're all focused
on increasing production because … our goal is to continue to supply product to
IOR and because the IOR is strategically critical in my view," chief
executive Christian Lange said. "[It's] critical because it supplies
almost all of its diesel to our mining industry, and our mining industry in
this country is the backbone of the country."
Industry demand
According
to IOR, the Eromanga facility produces mostly low-emissions diesel required for
underground mine operations in regional New South Wales, as well as solvents
used by Australia's chemical manufacturers.
UQ
School of Mining Engineering professor Peter Knights said with the mining
industry's large thirst for fuel, securing supply from domestic sources would
now come into focus. "It means that in a crisis like this, at least you
have some parts of your operation that continue to operate," Professor
Knights said.
"[Fuel
security] would be top of the minds of many mining executives at the moment, it
would lower their risk profile … without diesel fuel, your mine stops, you have
to park up your haul trucks."
IOR
also provides a modest amount of on-road diesel to the local community. "Given
our location, this is far more practical and less emissions-intensive than
trucking oil 1,000 kilometres to Brisbane to be refined and then transporting
it back again to western Queensland," Mr Morland said.
Queensland Minister for Natural Resources and Mines Dale Last said in a statement that the government was working with the industry to construct additional infrastructure needed for oil production. "We will continue to engage regularly with resource companies on infrastructure requirements to get this oil to market, including building a new refinery right here in Queensland if required," Mr Last said.
