Labour leader Jacinda Ardern was again asked about the disrupted fuel supplies in Auckland as a result of the pipeline fiasco. Credit: Mark Mitchell
New Zealand Refining chief executive Sjoerd Post will leave the company at the end of July as it faces a Government inquiry into the failure of the company's fuel pipeline that cost customers millions of dollars.
The company announced his departure on the eve of the release of its annualresult tomorrow.
The Marsden Point refinery operator said Post's announcement now gave it five months to recruit a new chief executive and allow for an orderly transition.
In 2016 Post was paid $1,539,000, an increase of nearly 8.5 per cent on the previous year.
He started in 2013 and soon into the job he faced a squeeze in global refining margins and under his watch, the company completed its $365 million Te Mahi Hou upgrade and extension to boost production.
However, in September the 170km refinery-to-Auckland pipeline was ruptured and the company was in the spotlight for its preparedness and response to the leak.
Airlines were hardest hit as the pipeline carries nearly all of Auckland's aviation fuel.
Flights were disrupted or cancelled for about 10 days until the pipeline was repaired.
Air New Zealand chief executive Christopher Luxon said the disruption cost his airline about $5m and it was looking at ways of recouping that.
The Government will investigate the cause of the rupture — likely caused by an unidentified digger operator — and how to improve the country's fuel resilience.
Sjoerd Post joined the company at the start of 2013, coinciding with a squeeze in global refining margins. Picture / NZME
Two digger drivers were interviewed about working at the Ruakaka site when Refining NZ's Auckland fuel products pipeline was ruptured, but neither could recall working near the pipeline.
Northland Regional Council group manager of regulatory services Colin Dall said the fuel leak - estimated at 124 cubic metres – was a breach of the Resource Management Act but the council "does not have a case for prosecution".
Dall said lengthy investigations found an unknown digger illegally searching for swamp kauri "may have" operated around the pipeline at the Ruakaka property.
Gouges apparently caused by a digger were believed to have triggered the pressurised pipeline's failure, but the actual date of the damage and what did it were not known.
Pipeline repair work site at Ruakaka, where a rupture caused a fuel leak estimated at 124 cubic metres. Picture / NZME
The damage could have happened any time after the pipeline's last inspection with a "magnetic flux leakage intelligent and sizing calliper pig" in July 2014, he said.
The company's share price has declined 6.3 per cent, or 16c, since then, recently trading at $2.38, and has paid 47c per share in dividends, not including whatever it declares in tomorrow's annual earnings result.
"Sjoerd has made an outstanding contribution over the length of his tenure, building a culture that is now strongly evident in the performance and resilience of the business," chair Simon Allen said in a statement.
"The board is pleased that Sjoerd has confirmed he will remain in the business for the next few months, seeing us through the succession process and a number of critical work programmes - including our impending refinery shutdown and the government inquiry into the pipeline incident."
Forsyth Barr analyst Andrew Harvey-Green forecasts NZ Refining will report a 73 per cent gain in annual profit to $81.6m tomorrow on a 16 per cent increase in revenue to $410.6m.
He also predicts the board will declare a final dividend of 8c per share, up from 6c a year earlier.
