Channel Infrastructure CEO Naomi James and operations manager Karl Philpott discuss the decommissioning of the refinery. Photo / Tania Whyte
There's no going back to refining crude oil at Marsden Pt.
That's the word from Channel Infrastructure, as most of the decommissioning work is complete, just months after the site was turned into an import-only terminal.
The new company said the decommissioning project was more than 70 per cent complete, and the plant has effectively been dismantled internally. Only the shells and structures remain.
"It's not possible to reverse that work that's been done, it's a permanent process and it's not a mothballing of the plant," Channel Infrastructure chief executive Naomi James said.
All cabling at the refinery has been cut at the ground, and heat exchanger bundles removed to be sent offsite for recycling.
She said that was why it was important that before Refining NZ made the decision to switch to an import-only terminal, the company went through an 18-month review process with broad engagement - because it was a permanent step.
"Only a small number of facilities are being preserved for potential reuse or sale. These are not the assets that would be required to restart an operating refinery," James said.
Calls for the refinery to be retained have come from many sectors, even before Refining NZ changed into Channel Infrastructure from April 1 and started importing refined fuel.
The Social Credit Party submitted a petition to Parliament with 18,000 signatures, calling for the Government to declare the refinery a national strategic asset and for it to compulsorily buy all the shares from the private owners using money created by the Reserve Bank.
Party leader Chris Leitch this week said it was almost impossible to restart the refinery because the major oil companies BP, Mobil and Z Energy - the biggest shareholders in Channel Infrastructure - moved as quickly as possible to decommission the site.
But James said it has been a complex process to shut down the refinery facilities, to make them safe and to convert to running import operations without disruption to the fuel supply.
"We've gone from in fact importing crude oil to importing refined fuel and it's all flowing through the system and has been for four months now."
In the lead-up to April, the refinery's workforce was about 300 but that number is now down to half at Channel Infrastructure.
James said 50 staff were working on the decommissioning and about 70 people were employed as part of the terminal workforce.
The company is supporting 12 people who are actively looking for work.
The overall budget for the import terminal conversion project is between $200 million and $220 million. That includes the decommissioning work, the upgrades to the terminal facilities and workforce transition costs. James said the new company continued to track on budget.
James said all the decommissioning work would finish sometime next year. Once the refinery closed, she said Channel Infrastructure spent 24 hours a day for two months on the decommissioning exercise.
"Structurally it's all safe and sound and doesn't need anything so we'll fence it off. We'll keep operating the terminal and we expect the terminal to grow because we expect there'll be more storage needed for fuel security," James said.
"Jet fuel demand is growing in New Zealand. It increased 40 per cent in the five years before Covid hit and now it's growing again so the jet fuel storage site will roughly double."
By 2040, she said between 70 per cent and 80 per cent of the refined fuel Channel Infrastructure handled would be jet fuel.
Due to an increase in long haul international flights, Auckland Airport presently consumes 80 per cent of the jet fuel sent through the pipeline from Marsden Pt.
Channel Infrastructure has tank storage capacity of close to 900 million litres but only one third or 280m litres across 27 tanks is currently utilised.
Crude oil tanker STI LILY, due at Marsden Pt in about two weeks, will be the largest ship to offload jet fuel, diesel and regular petrol for Channel Infrastructure.
James said Channel Infrastructure continued to assess options for repurposing of the Marsden Point site, including the Maranga Ra solar project, sustainable aviation fuel, bio-fuel and hydrogen supply.
She said the other important thing to remember was the refinery has had no impact on fuel prices.
"Even if the refinery was running, fuel prices would still be where they are because are being driven by international factors - global crude prices, global refining margins, and by global shipping rates - and the refinery hasn't impacted any of that."