There was plenty of fuel stored at Marsden Point and the ability to more than double that storage, the chief executive of New Zealand’s former oil refinery says.
Channel Infrastructure, New Zealand’s biggest fuel import terminal, had 300 million litres of fuel stored on its Northland site, chief executive Rob Buchanan said.
The war in the Middle East and the effective closure of the Strait of Hormuz – an access point for about 20% of the world’s crude oil – has led to a swift spike in prices at the pump in New Zealand.
Some Kiwis were stockpiling petrol, with a rush on discount fuel and petrol cans in Auckland over the weekend.
But Buchanan said there was no need to panic, with a huge amount of fuel stored at Marsden Point.
“My advice is we need to be really measured and calm about the situation ... Storage levels in our terminal are absolutely normal and the shipping that we’ve got on its way to New Zealand is in line with expectation.”
Buchanan spoke on Monday after the site blessing of Channel Infrastructure’s $30 million head office redevelopment, which involved building a new combined administration building and relocated control room.
In response to criticism the refinery should not have closed – including comments by Associate Energy Minister Shane Jones that closure “fatally wounded” New Zealand’s fuel resilience – Buchanan said having the refinery open would not make any difference to the current challenges.
“There’s no issue with refinery supply, the issue is with crude supply and we’d have the same challenges if the refinery was still here.”
Government inquiries pushed by Jones’ New Zealand First party in 2024 found the cost of up to $7.3 billion to reopen the refinery was prohibitive.
A fuel security study found a refinery was one of the least efficient methods of providing fuel security, Buchanan said.
The study found accelerating the transition of New Zealand’s vehicle fleet to zero-emission vehicles would be the most effective measure, while increasing fuel storage and investing in biofuels were also effective measures.
Buchanan said Channel Infrastructure’s Marsden Point site had 350 million litres of unused storage tanks that could be brought into service.
If commissioned and filled, this would give the country a further 14 days’ buffer of stored fuel.
But Buchanan admitted it was not an instant fix and it would be up to the fuel companies and the Government to commission and fill the tanks.
Z Energy was spending $30 million to restore a 30-million-litre tank for jet fuel.
The tank was due to be commissioned by the end of the year but the company would still have the issue of filling the tank once commissioned, Buchanan admitted.
There were restrictions on refined fuel imports, with South Korea only allowing 2025 levels to be bought, preventing stockpiling.
Buchanan said a biofuel refinery was on the cards, with Air New Zealand recently joining a consortium for the project, alongside Qantas, and a final investment decision expected later this year.
“The great thing about that is the feedstock for it is domestic, it’s not like you’re trying to import crude. The only body of water that feedstock has to cross is the Waitematā Harbour.”
Buchanan said the amount of feedstock being eyed up was commercially sensitive. A biorefinery would take three years to build.
The head office redevelopment would free up land designated for the biorefinery, as well as showing Channel Infrastructure’s long-term commitment to the site, he said.
Monday’s blessing was led by representatives of the hapū Patuharakeke, who acknowledged the site in the shadow of Mount Manaia and next to the Whangārei Harbour.
Whangārei Mayor Ken Couper said the fact the site was operating on “one of the most beautiful places on earth” was testament to the good stewardship of Channel Infrastructure.
With the use of local contractors, the work would be a big boost to Northland and give confidence for other investment, he said.
“The $30 million investment in Northland is a huge confidence in this site and the role Northland will play in the energy sector,” Couper said.
Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.