Thursday, 18 August 2022
OpinionSportBusinessLifestyleRural
Residential Property Listings
Driven MotoringPhotosVideoClassifieds
KaitaiaWhangareiDargaville
NZ HeraldThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay Of Plenty TimesRotorua Daily PostHawke's Bay TodayWhanganui ChronicleThe Stratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu CourierVivaEat WellOneRoofDriven MotoringThe CountryPhoto SalesNZ Herald InsightsWatchMeGrabOneiHeart RadioRestaurant Hub

Advertisement

Advertise with NZME.
Northern Advocate

Hundreds of jobs could go as Northland's Marsden Pt Oil Refinery likely to be import only terminal

25 May, 2021 06:00 PM6 minutes to read
Marsden Point Oil Refinery may stop refining fuel and become an import terminal only.

Marsden Point Oil Refinery may stop refining fuel and become an import terminal only.

By
Mike Dinsdale

Deputy editor

VIEW PROFILE

Northland's Marsden Pt Oil Refinery has moved a step closer to end refining oil to become
an import storage terminal only, with a union official saying it could mean hundreds of jobs lost.

Refining NZ, which operates the refinery, has announced an in-principle agreement on key commercial terms with Z Energy for converting operations at Marsden Pt to a dedicated fuel import terminal. This follows a similar agreement reached with bp in February 2021.

The announcement means Refining NZ will now take steps to prepare for a shareholder vote to approve this change in business model, in coming months.

If the conversion goes ahead it's likely to lead to job losses at the refinery - which is one of Northland's main employers - but exactly how many of the staff would go is not yet known.

However, First Union transport, logistics and finance secretary Jared Abbott said if it goes ahead the move would see about 300 of the refinery's 400 on-site employees go, with several hundred more in the wider community from firms that rely on the refinery for their income.

Abbott said those losses would have a big impact on the Bream Bay and wider Northland economy.

The country's only oil refinery posted an annual loss of $198.3 million last year due to a glut in fuel supplies globally, combined with the impact of Covid-19 on refinery output, pipeline fees and plummeting demand for fuel.

The financial loss included a $158m non-cash writedown on its refining assets compared with a small profit of $4.1m in the previous year to December.

Advertisement

Advertise with NZME.

The publicly-listed company has reduced production from 115,000 barrels a day to about 90,000 - the same level as in 1995 - and has stopped producing bitumen, a residue from petroleum distillation used for road surfacing and roofing.

In April this year Refining NZ was given a 35-year consent to continue operating the refinery and to operate an import terminal if the company wants to establish one.

Related articles

Northland DHB to expand electric vehicle fleet and install charging stations

14 May 05:00 PM

Refining NZ given the go-ahead to operate for another 35 years

05 Apr 05:00 PM

Refinery job losses a huge blow for Ruakākā community

19 Feb 04:00 PM

News in brief: Car flips on roof, fire at refinery

18 Feb 04:00 PM

As a condition of the consent, Refining NZ has committed to working with the Northland Regional Council ahead of time to plan for an orderly wind-up of operations, should refinery and import terminal operations on-site cease in the future, to ensure ongoing compliance with the conditions of the consents.

The agreement with Z Energy is for an initial term of 10 years. The agreement includes a provision for third party access to unutilised capacity on its Refinery to Auckland Pipeline (RAP).

Refining NZ remains focused on concluding negotiations with its only other current refinery customer Mobil, CEO Naomi James said.

Refining NZ CEO Naomi James.
Refining NZ CEO Naomi James.

"This is a significant milestone for us, and it means we can progress to the next stage and prepare for a shareholder vote to approve this shift in our operating model before a final decision is made.

"A change from refinery to import terminal would involve little change for New Zealanders. However, this will be a big change for our operations and workforce at Marsden Pt and for our community. A key focus for us is on how we support our people through this transition and work with central and local Government and agencies to make this a well-planned and managed transition for our workforce and the region.

"Within the business, we have been working hard on the detailed planning about exactly how we might run an import terminal operation, and what other opportunities there might be for our site.''

Advertisement

Advertise with NZME.

Read More

  • About 90 jobs to go at Marsden Pt refinery over the next quarter - NZ Herald
  • Refining NZ to scale down its Marsden Point operation from next year - NZ Herald
  • Potential job losses at Marsden Pt Oil Refinery could run into hundreds - NZ Herald
  • Future of Northland's Marsden Pt Oil refinery uncertain as company does strategic review - NZ H...

James said Marsden Pt has huge potential being a large industrial consented site, with deep water port access, large electricity and gas connections and a highly skilled workforce.

''We want to explore what the best opportunities are for the site, for our region, and for New Zealand," she said.

The next step will involve obtaining the necessary lender and shareholder approvals, negotiating binding agreements with customers and progressing detailed plans for the change in operations, including workforce changes.

On current estimates, a final decision in Q3 2021 would enable a conversion to occur by mid-2022.

Abbott said the refinery had about 200 employees directly on the site - around 150 of who were First union members - with another roughly 200 contractors on the site full time.

''A study a few years ago found that every refinery job, supported another eight jobs in the wider community. So there are so many people and companies that rely on the refinery for big parts, or all, of their income.

''There will be a lot of people, and companies, worried about their futures if this goes ahead. Most of the staff are highly skilled and highly paid, and their money goes back into the local economy, so if they go, that money goes too.''

Abbott said the company had not yet let the union know which workers would be retained if the proposal goes ahead, which left a lot of worry and uncertainty for the staff.

''We've known for a year or so that this could happen - the writing has been on the wall - but that doesn't make the prospect of losing your job any easier for the workers.''

Refining NZ is the country's only oil refinery and the leading supplier of refined petroleum products to the New Zealand market, including petrol, diesel, aviation fuel and other products.

Refining NZ processes a range of crude oils imported from offshore markets to produce premium and regular petrol, diesel, aviation and kerosene, and fuel oils for its oil company customers (bp, Mobil and Z Energy).

Refining New Zealand's Marsden Point Oil Refinery is likely to be a fuel import terminal only from next year.
Refining New Zealand's Marsden Point Oil Refinery is likely to be a fuel import terminal only from next year.

The Marsden Pt oil refinery supplies around 70 per cent of New Zealand fuel demand, delivering fuel to Auckland through the RAP, to Northland from the Marsden Point site and to other parts of New Zealand through coastal shipping vessels.

In response to a significant decline in refining margins as a result of excess refining capacity in the Asian region, Refining NZ initiated a strategic review of the business to determine the optimal future business model and capital structure for the company's future.

Advertisement

Advertise with NZME.

Latest from Northern Advocate

Northern Advocate

Inmate lights fire in cell, disabling prison block's sprinklers

18 Aug 06:45 AM
Northern Advocate

'It's tough': NZ Rugby board member speaks out on Ian Foster decision

18 Aug 06:00 AM
Northern Advocate

Person seriously hurt in Tikipunga crash

18 Aug 04:30 AM
Northern Advocate

Live: Storm's fury - hundreds evacuated in Nelson; 'boulders rolling down the street'

18 Aug 01:56 AM
Northern Advocate

Covid: 4540 new cases; 473 in hospital, 16 deaths

18 Aug 01:00 AM
Get a free appraisal with Barfoot and Thompson Whangarei

Most Popular

'Disturbing' sex ed handout given to young students: innocence stolen, says mum
Northern Advocate

'Disturbing' sex ed handout given to young students: innocence stolen, says mum

18 Aug 12:47 AM
'I got kicked three times': Mother on trial for ill-treatment of her nine children
Northern Advocate

'I got kicked three times': Mother on trial for ill-treatment of her nine children

15 Aug 05:32 PM
Premium
No going back: Marsden Pt's refining shutdown
Northern Advocate

No going back: Marsden Pt's refining shutdown

11 Aug 05:00 PM

Advertisement

Advertise with NZME.
Get a free appraisal with Barfoot and Thompson Whangarei
About NZMEHelp & SupportContact UsSubscribe to The Northern AdvocateHouse Rules
Manage Your Print SubscriptionThe Northern Advocate E-EditionAdvertise with NZMEBook Your AdPrivacy Policy
Terms of UseCompetition Terms & ConditionsSubscriptions Terms & Conditions
© Copyright 2022 NZME Publishing Limited
TOP