Northland's Marsden Pt Oil Refinery to become import only terminal with the loss of hundreds of jobs

The news hundreds of Marsden Pt Oil Refinery staff, and, many more in the wider community, have been fearing has been confirmed - the refinery will become a fuel import only terminal.

Refining NZ has confirmed that its Board has taken a final investment decision confirming the change in operations of their Marsden Point site.

This means that Refining NZ will transition to an import-only fuel terminal from April 2022.

The refinery's shareholders voted overwhelmingly in August for the change - with the new entity known as Channel Infrastructure - to go ahead due to a glut of fuel supplies globally, combined with the impact of Covid-19 on refinery output, pipeline fees and plummeting demand for fuel.

The board has now confirmed that decision, with the number of employees at the site is expected to drop from 300 to 60 over the next couple of years, with hundreds of contracting jobs in wider Northland also likely to be cut.

Marsden Pt Oil Refinery will become an import only terminal with the loss of several hundred jobs.

The board's decision follows the signing of long-term terminal services agreements with all three refinery customers - bp, Mobil, and Z Energy - on terms approved by shareholders in August.

"Today is a momentous day in the journey to transition our business away from operating as a refinery and to an import-only fuel terminal. After 60-years of operations as New Zealand's only oil refinery, we now have certainty about our future, and as we look back on the past with pride, we also look to the future with confidence that our business will be able to continue to contribute to our community, and New Zealand, long into the future," Refining NZ CEO, Naomi James said.

Work is well advanced to prepare the site to operate as an import-terminal and to plan for the safe shutdown and decommissioning of the refinery.

''In recent weeks we have started the process of making appointments for the team who will be responsible for managing the transition, and decommissioning, as well as longer-term work with Channel Infrastructure.''

Jones said today's announcement won't impact most New Zealanders, however it will have a huge impact on the refinery's people, and wider community, and the company is implementing a range of transition support measures to assist those who will be moving on to other employment after we transition.

''This is a key focus for me personally, as I know that we have some of the best talent in the country working on our site, who will continue to play a critical role in the ongoing operation of our refinery over the next six-months. I am committed to supporting them through this time to find new jobs, or training opportunities – so they are ready to move to new jobs, when we become Channel Infrastructure, and we are working with other businesses to skills-match our people with their vacancies for the period after we transition,'' she said.

Refining NZ CEO, Naomi James

''In addition, we have also agreed to provide dedicated private storage to customers. This is the first of several new growth opportunities we have identified for the future of Channel Infrastructure, and we look forward to providing further updates on other site repurposing opportunities in due course.''

Jones said Channel Infrastructure's vision is to be New Zealand's leading independent fuel infrastructure company.

It will use the deep-water harbour and jetty infrastructure at Marsden Pt to import refined fuel, which is owned by its customers. This will replace the crude oil that its customers import today for refining.

Fuel will be stored at the Marsden Pt site in existing tanks at the largest fuel terminal in New Zealand, with 180 million litres of shared capacity, as well as capacity to provide additional storage.

Fuel from Marsden Pt will be distributed on behalf of Channel Infrastructure's customers primarily to the Auckland and Northland markets, which make up around 40 per cent of New Zealand's fuel demand, through the 170-kilometre Refinery to Auckland Pipeline (the RAP) and the truck loading facility adjacent to the Marsden Point site.

Conversion to an import terminal will reduce the Company's direct CO2 emissions by almost one million tonnes per annum, delivering around a third of the Government's first Emissions Reduction Budget.

Refining NZ has been the country's only oil refinery since it was established in 1961. In response to a significant decline in refining margins as a result of excess refining capacity in the Asian region.

For more information on Channel Infrastructure visit: www.refiningnz.com/what-ischannel-infrastructure/

Meanwhile, a petition has garnered more than 17,800 signatures calling on the Government to help save the oil refinery from shutting down.

Whangārei-based Chris Leitch, of the Social Credit Party, started the petition on change.org, calling on the Government to declare the refinery a nationally strategic asset and to compulsorily buy all the shares from private owners using money created by the Reserve Bank.

The Government, he said, should then turn it back into a state-owned enterprise and allow fuel retailers, rather than a monopoly consisting of major oil companies as at present, to sell fuel in the country.