Marsden Pt: Potential for more than 1 billion litres of refined crude to be imported

Refining NZ chief executive Naomi James and chief operating officer Jack Stewart will both be a part of the renamed company Channel Infrastructure. Photo / Tania Whyte

The largest fuel terminal in New Zealand based at Marsden Pt will have the capacity to import up to 3.5 billion litres of refined fuel per year once the refining of crude stops.

Presently, Refining NZ uses only about one third of the total crude oil tank capacity on site and chief executive Naomi James said there was 180 million litres of base capacity in shared terminal facility and another 100 million litres in private storage.

"We'll manage about 3 to 3.5 billion litres per annum as a terminal and that's all going into Northland and Auckland markets. Today as a refinery, we are also sending product or our customers are sending product via the coastal vessels around other parts of New Zealand."

Her comments come as Refining NZ is raising $43.5 million through a share placement and purchase plan to fund private storage services.

Storage capacity will require an initial capital commitment of about $30m, and is expected to result in incremental revenue of about $50m on a fixed rental basis over a 10-year term.

This capacity will be progressively made available following required works from the start of terminal operations through to early 2023.

Refining NZ is undertaking the equity raise through an underwritten $38.5m placement of new shares and a non-underwritten $5m share purchase plan.

Eligible shareholders can purchase up to $15,000 worth of shares.

The offer closes on Monday next week.

Refining NZ shares were trading at 86 cents on the NZX yesterday.

"Our shareholders don't change albeit we'd expect over time we'd probably attract different sort of shareholders who are more looking forward for that very stable yield type investment that this sort of infrastructure can deliver," James said.

She said the $39m equity raised two weeks who would specifically go towards funding extra tanks beyond the base terminal facility.

The extra tanks would allow customers more flexibility in their supply chain and enable them to bring in bigger ships to ensure efficiency and opportunity for them in having that additional capacity, she said.

The company will continue refining crude oil until the end of March 2022 then trade under Channel Infrastructure.

"There's still a lot of work to be done because we need to decommission the refinery and that occurs over about another year and we also have a range of projects to upgrade the terminal facilities and that occurs over about five years or so.

"Private storage is step one and we are keen to look at solar we've got a shovel-ready solar project on land we own next to refinery site.

"We're keen to look at other imports into the site and then Government will be bringing in a biofuels mandate so that will need to be accommodated in some way from an infrastructure perspective and longer term other things like hydrogen."

Refining NZ said conversion to an import terminal would reduce the company's direct carbon dioxide emissions by almost one million tonnes per annum, delivering around a third of the Government's first Emissions Reduction Budget.

Social Credit Party leader Chris Leitch has presented an 18,000-signature letter to Whangārei list MP Dr Shane Reti, calling on the Government to declare the refinery a nationally strategic asset and to buy all shares.