Refining NZ shareholders have voted overwhelmingly to switch Marsden Point to an import-only fuel terminal from mid next year, signalling the loss of hundreds of jobs at Marsden Point.
The change will mean the Marsden Point operation will no longer process crude oil, and all of the country's fuel and petrol supplies will be imported from Asia.
The number of employees at the site is expected to drop from 300 to 60 over the next couple of years, with hundreds of contracting jobs also likely to be cut.
Speaking to shareholders at a meeting in Auckland today, Refining NZ Chief executive Naomi James said there was no reason to believe the move would make the country more vulnerable to fuel insecurity.
New Zealand could source fuel from a range of refineries in a range of countries, she said.
Refining NZ chair Simon Allen told shareholders this morning the strategic review had made clear the business could not continue as normal. After 60 years of operations, change was difficult and unsettling, he said.
"Throughout this process, we have always maintained that our priorities were to realise
full value for the company's assets and deliver more sustainable returns 'through the
cycle', and to support our workforce, and the wider community through what will be a
significant change to the company's operations."
Z Energy chief executive Mike Bennetts said today's decision was a good outcome for the listed fuel retailer's operations and financial position.
"It will mean a significant reduction in our working capital as we will hold less crude and will mean reduced earnings volatility from no exposure to refining margins meaning greater investor confidence."
He said conversion to an import terminal would ensure the country's fuel needs were maintained.
"Industry-wide the conversion will mean more cargoes on the water coming to New Zealand from multiple regional refineries, therefore reducing the single point of failure risk from disruption to the supply chain," he said.
"After the transition to an import terminal, there may be fewer hydrocarbons in New Zealand, in the form of crude and intermediates, but there will be more usable product ready to be distributed to our customers."
A spokesperson for the Ministry of Business, Innovation and Employment (MBIE) earlier said it was preparing advice for the energy minister on the implications of the decision, although the advice it had received suggested the move to an import terminal was not a major risk to fuel security.
One option would be to require fuel companies to hold a minimum level of oil reserves.
"There is not a strong economic case to hold onshore reserve stocks beyond the current stock level, but there may be other reasons to consider this, for example, the management of international supply chain risks," the MBIE statement said.