The Marsden Point oil refinery, south of Whangārei, was the country's only refinery until it was decommissioned in 2022. Photo / NZME
The Marsden Point oil refinery, south of Whangārei, was the country's only refinery until it was decommissioned in 2022. Photo / NZME
New Zealand First minister Shane Jones admits the Crown cannot afford to reopen or build a new oil refinery, with a report showing it would cost up to $7.3 billion.
But the Resources, Regional Development and Associate Energy Minister is instead pushing for a special economic zonearound the former Marsden Point refinery in Northland, to enable alternative fuel manufacturing like biofuel.
Such a precinct would help protect both Northland and New Zealand’s fuel security and would support the economy, he said.
Channel Infrastructure NZ, which now operates the former Marsden Point refinery as a fuel import business, welcomed Government support for its vision of an energy precinct at Marsden Point.
Jones said NZ First remains “extremely disappointed” New Zealand no longer has its own oil refinery.
The privately owned refinery was decommissioned in 2022. The then-Labour Government was reassured New Zealand’s fuel security would not be put at risk, with oil companies saying resilience would be better as the country would be less reliant on a single refinery.
But after Cyclone Gabrielle, NZ First pushed for the refinery to be reopened as a strategic national asset.
A study released today estimates it would cost $4.9b to $7.3b to reopen the Marsden Point refinery and the benefits to New Zealand’s fuel security would be limited as the country would still have to rely on imported crude oil.
Despite Prime Minister Christopher Luxon saying last week the coalition Government would consider reopening the refinery, Jones admitted today the price was too steep.
“Upwards of $6 billion is a stupendous amount of money, at a time when we have a priority to rebuild Whangārei Hospital.
Shane Jones (centre) says the Marsden Point energy precinct still needs to be voted on in Parliament but he believes he has the support of Prime Minister Christopher Luxon (left). Photo / NZME
“That’s not to say that refinery capacity would not be created at Marsden Point but to recreate what Muldoon built is fiscally prohibitive.”
Instead of rebuilding the refinery, New Zealand’s fuel and energy resilience could be improved by increasing the storage of refined fuel and refining alternative fuels at Marsden Point, such as biofuels, sustainable aviation fuels and green hydrogen.
To support this, Jones said a special economic zone should be created around Marsden Point, which could include business-friendly regulations, infrastructure and facilities, investment support, and customs and trade facilitation.
Such a zone would mean development could not be stopped by neighbours, he said.
“I’m ensuring that this part of Northland no longer falls prey to Nimbyism from groups who don’t want economic development.”
The special economic zones will be considered by Cabinet in the first half of this year and Jones said it will still need to be voted on in Parliament.
While the oil refinery is no longer, Marsden Point still has infrastructure to build off, says the National Road Carriers Association. Photo / Michael Cunningham
But he felt he has the support of Luxon, who lamented the closure of the refinery and said he was open to consider options.
“The Resources, Regional Development and Associate Energy Minister Shane Jones, has described Channel’s future plans as ‘exciting’, and described how Marsden Point could be at the heart of boosting New Zealand’s fuel and energy security,” Miller said.
“This is a resounding vote of confidence in the future of our company, and we look forward to seeing the full potential of the energy precinct delivered over time.”
NRC supports Special Economic Zone at Marsden Point for energy resilience
The proposal also has support from the National Road Carriers Association, as the Marsden Point site has existing infrastructure to build form, said general manager of policy and advocacy James Smith.
The country needs to urgently increase its capacity to withstand disruptions, he said.
“New Zealand will be reliant on imported fuels for several decades until users transition to alternatives as they become commercially viable.
“New Zealand is also facing increased supply chain disruptions from geopolitical conflict and natural or physical disasters that impede shipping.”
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.
