Northland’s Marsden Point was once home to New Zealand’s last remaining oil refinery – now the decommissioned manufacturing area is fenced off and pipes are rusted.
Aspirations to restart it were dumbfounding, Rob Buchanan, the chief executive of the company that owned it, Channnel Infrastructure, explained to Markets with Madison.
“It has been completely cleaned out and it has been fenced off. There is no prospect or no possibility of turning it back on. There’s no big green lever.”
Returning it to oil refining operations would require a substantial rebuild, which would cost billions of dollars, he said – something not at all feasible for the company now focused solely on fuel storage.
“We’ve completely changed our business model. Our shareholders want us to be an infrastructure operator rather than a manufacturer of fuels.”
The company and its shareholders decided overwhelmingly to shut down the refining operation in August 2021, and it was fully decommissioned earlier this year.
Hundreds of workers lost their jobs.
“That was an economic decision, fundamentally around the economics of running a what is, globally, a relatively small refinery in a small country like New Zealand, versus large international refineries in Asia who are able to produce refined product at much lower cost.”
“There was certainly no political support at that point in time from the Government of the day for a continued operation of the refinery. And that’s just a matter of fact.
“We consulted with the [then-Labour] Government and it’s fully decommissioned now.”
There are constant reminders of the once active processing facility on site: the red-and-white-striped towers that once let off plumes of steam are dry and silent, storage tanks labelled Brent Crude are empty, and lanyards and health and safety forms still say Refining NZ, the company’s former name.
However, the company is investing in its future to ensure fuel security.
It has built brand-new jet fuel tanks on site, sealed with shining silver dome lids and sitting on fresh water-tight asphalt.
Some 3.4 billion litres of already-refined fuel passed through this facility each year – equal to 40% of New Zealand’s total petrol and diesel demand and 80% of total jet fuel demand.
The company is considering new opportunities to utilise its waterfront site, which includes a naturally deep-sea port.
The company has been earning more off its import-only operation, announcing a half-year profit of $16.6 million last week, an increase on the previous year of 45%.
See inside the shutdown refinery for the first time, and hear how the site could be repurposed, in today’s episode of Markets with Madison above.
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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.
Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.