Marsden Point facility, the country's only oil refinery. Photo / NZ Herald
The cancellation of a two day strike at the Marsden Point oil refinery next week has left the country's four main oil companies with an unwanted 50 million litre emergency shipment of aviation fuel that set sail from South Korea at the weekend.
Z Energy, BP, Mobil and Chevron (owner
of the Caltex brand), acting in concert as the Customer Supply Group, sourced the emergency shipment late on Friday amid fears that Auckland International Airport could run short of aviation fuel if the strike, scheduled for Oct. 7 and 8, had gone ahead, precipitating a break in production at the refinery of at least 11 days while the refinery was shut down, closed for two days, and then restarted.
The shipment, worth perhaps US$60 million, was loaded in Korea over the weekend and the tanker carrying it was already on the way when unions representing some 160 workers at the refinery agreed today to cancel their notice of industrial action and to seek members' agreement not to issue another for at least five weeks and to seek facilitated bargaining through the Employment Relations Authority.
Jonty Mills, a spokesman for BP, which chairs the customer supply group, said the companies were now "working frantically" to sort out options for the aviation fuel, which cannot simply be unloaded at Marsden Point, since that would overload New Zealand's limited jet fuel storage facilities. In total, counting refinery, Auckland and airport storage, the country has around 15 days' aviation fuel cover.
"The destination of the import cargo is right now unknown," Mills told BusinessDesk. Options appear to include placing the shipment on the international market for tender, diverting it to another buyer, or returning it to Korea for offloading, all of which will carry shipping and other costs related to the rushed and volatile nature of the order.
