$365m refinery unit up and running

Dave Cunningham, project director for the Marsden Pt Oil Refinery's $365 million Te Mahi Hou project, in front of the finished works that was fired up this month. Photo / Michael Cunningham

It finished ahead of schedule, will reduce Greenhouse gas emissions, lower production costs and has already pumped about $128 million into the Northland economy - the Marsden Pt Oil Refinery's $365 million Te Mahi Hou project has been fired up after more than two years of construction.

Refining NZ, the owner and operator of New Zealand's only refinery, has successfully started its Continuous Catalyst Regeneration unit as part of the Te Mahi Hou project - three weeks ahead of schedule - with CEO Sjoerd Post saying about $128 million of the cost has been spent in Northland.

Construction has been carried out by New Zealand companies and at its peak the project employed about 440 people, mostly from Northland.

Mr Post said Te Mahi Hou was producing "on-specification" petrol three weeks earlier than originally scheduled and as a consequence the refinery's 50-year-old platformer (petrol manufacturing) unit it replaces had been shut down.

"This is a major milestone for Te Mahi Hou and follows four years of hard work - designing, planning, scheduling and construction - all of which has contributed greatly to Northland as well as the New Zealand economy. There is still more to do in the coming weeks to bed the project into the refinery but for now, everyone involved can be justifiably proud of getting Te Mahi Hou to this major milestone," Mr Post said.

Te Mahi Hou project director David Cunningham said the successful early start was down to a focused, highly professional project team.

"We've used our own major project know-how from recent expansions to co-ordinate engineering design across three locations, secure critical components and bulk materials from across the globe and 'package' them at Marsden Point with the help of a network of contracting companies," Mr Cunningham said.

"By concentrating on getting the details right we've had a world-class delivery at every milestone over the past four years. Our sole focus in the coming weeks is to get Te Mahi Hou safely integrated into the refinery."

It will lift the refinery's annual petrol production by two million barrels to about 13 million barrels, increasing the refinery's share of the country's petrol demand from around 55 per cent to 65 per cent. It will lead to a reduction in carbon dioxide emissions - the primary greenhouse gas - by about 120,000 tonnes a year. It is expected to lift the company's gross refinery margin of about US.85 to US.90 per barrel and will increase the refinery's operating cash flows by around $50-$55 million a year.

Mr Post said: "Te Mahi Hou is key to the growth of our refining business."