Digging at the site of the critical fuel pipeline was identified as an "exploratory" search for swamp kauri the day before the rupture happened, according to an industry insider with stories of the extraordinary wealth attached to excavating the buried logs.

Northland's Milton Randell was driving past the site of the pipeline rupture near Ruakaka, just south of Whangarei, last Wednesday, saw the earthworks and believed he was seeing the signs of a swamp kauri hunt.

Randell has 40 years experience in digging swamp kauri out of the ground and would be one of the most experienced to have worked in the industry.

His immediate impulse was to think it was a swamp kauri site - the same detail the NZ Herald was provided by a source familiar with the response to the rupture of the nation's only fuel line to Auckland.

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The damage has put the pipeline out of action for 10-14 days and is causing severe disruption to flights in and out of Auckland Airport. Jet fuel can't be transported by road leaving airlines operating on reserves or having to fill up elsewhere.

"Like they had been digging around for a log - that's what it looked like," said Randell, 77, who currently runs Milton's Vintage Bulldozers & Tractors museum in Kerikeri.

"I saw they had been digging there and that's what I thought they were doing.

"If they were doing an exploratory dig, they might have hit the pipe and not said anything."

Randell remembered seeing it on Wednesday as he travelled past it on a trip from Kerikeri to Rotorua.

When he returned to the site yesterday - Sunday afternoon - he saw diggers and trucks gathered in the same area. He saw the area again on the evening news and that was when he learned the critical fuel pipeline to Auckland had been ruptured.

Randell's account comes as agencies responsible for regulating swamp kauri removal say there would likely be no official record of who was digging there.

Milton Randell said he saw signs of digging before the rupture. He's pictured at Milton's Vintage Bulldozers & Tractors museum in Kerikeri which is filled with kauri industry memorabilia.
Milton Randell said he saw signs of digging before the rupture. He's pictured at Milton's Vintage Bulldozers & Tractors museum in Kerikeri which is filled with kauri industry memorabilia.

The Ministry of Primary Industries said it only keeps records of where kauri has come from at the point it is milled and the Northland Regional Council only needs consents when the digging is in wetlands.

Herald reports that the damage was believed to have been caused by digging for swamp kauri were dismissed as "fake news" by Refining NZ chief executive Sjoerd Post today.

His comment followed an earlier comment by a Refining NZ spokesman that there were claw marks found on top of the pipe and pieces of swamp kauri found nearby.

The Herald also obtained photographs showing damage to the pipe and swamp kauri at the scene.

Refining NZ has not returned calls to expand on the "fake news" claim.

Randell said the swamp kauri business had grown with Chinese interest in the market and attracted "cowboys" who did not follow the laws around extraction and sale.

The money associated with it was illustrated through a log he had removed from Kaitaia around Christmas which he said appeared to have been sold into China in breach of the same laws.

Massive chunks of swamp kauri are being sold for millions of dollars in China.
Massive chunks of swamp kauri are being sold for millions of dollars in China.

Randell said he had removed a log weighing 110 ton that was 4.2 metres wide and 9 metres long which he had sold to a New Zealand company for $65,000.

That same log had then been waterblasted and sold to Chinese interests for $200,000, he said.

He said he recently had a visit from a Chinese man who had photographs of the log taken in China where two slabs had been removed from the log and sold.

The first slab sold for $2 million and the second for $1.5m, he said.

Randell said there had been extensive efforts to get around Ministry for Primary Industries attempts to clamp down on illegal trading.

He said those regulatory efforts had been stepped up because of "cowboy" activity which was encouraged by large financial rewards.

The law stated that swamp kauri could only be exported as a finished product - for example, with slabs sold as finished tabletops.

But he said he was aware of one exporter whose practice had been to sand and polyurethane the ends of the slabs.

It meant inspectors looking into shipping containers saw an apparently finished product, unaware that the raw material inside was being moved offshore.

Randell said the inspectors had eventually rumbled the scam and the exporter had "stuffed it up for everybody else".

"There were a whole lot of cowboys who stuffed it up for all of us because they could see the dollars in it."

Randell said exploits included not getting permits, digging in wetlands and not paying royalties to landowners - usually around $200 for each metre extracted.

"They were just giving the industry a bad name."

Randell said "you get on a high" hunting the logs which were akin to digging for buried treasure.

Ministry for Primary Industries spokesman Sid Pickering said the agency only held records showing the location from which swamp kauri was removed when sawmills were given "milling statements".

He said statements naming where kauri had come from were able to be provided anytime before milling started.

And Northland Regional Council regulatory services manager Colin Dall said there were no permits issued from the site where the rupture happened.

He said permits were only needed for extraction in wetlands or where water was diverted or discharged.

"Most kauri extraction on farmland does not require a resource consent from the regional council.

"There are only a handful of consents in Northland for activities associated with kauri extraction."