Marsden Pt Oil Refinery is on track to convert into a fuel import only terminal next year.
Marsden Pt Oil Refinery is on track to convert into a fuel import only terminal next year.
The Marsden Pt Oil Refinery is on track to reopen as a fuel import-only terminal next year, with Refining NZ concluding negotiations with its customers.
The refinery's shareholders voted overwhelmingly in August for the change - with the new entity known as Channel Infrastructure - to go ahead due toa glut of fuel supplies globally, combined with the impact of Covid-19 on refinery output, pipeline fees and plummeting demand for fuel.
The board of directors was expected to make a final decision at the end of the third quarter but a final sign-off date has not been decided.
In a statement on Monday, which was also presented to the market, Refining NZ said it has been focused on concluding the negotiation of Terminal Services Agreements (TSAs) after signing term sheets with all customers earlier this year and having obtained shareholder and lender approvals for the conversion of operations at Marsden Pt to an import terminal.
''Finalising the TSAs is the key remaining step ahead of the Refining NZ Board's final investment decision. Significant progress has been made with customers on these complex fully-termed agreements, and all parties remain committed to finalising the TSAs as soon as possible. Preparations for a conversion in (the first half of) 2022 remain on track,'' CEO Naomi James said.
"All parties are working hard to conclude these agreements as soon as possible. The team at Marsden Pt is doing an exceptional job of keeping the refinery running under the current Covid-impacted situation and with ongoing uncertainty about their future. We all remain focused on ensuring the continued safe operation of the refinery, and on executing our plans for a well-managed transition."
Refining NZ CEO Naomi James
It's understood that under the changes 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.
Fuel would be stored at the Marsden Pt site in existing tanks at what would be the largest fuel terminal in New Zealand, with 180 million litres of shared capacity, as well as capacity to provide additional storage if required. Fuel from Marsden Pt would be distributed on behalf of Channel Infrastructure's customers primarily to the Auckland and Northland markets, which make up about 40 per cent of New Zealand fuel demand, through the 170km Refinery to Auckland Pipeline and the truck-loading facility adjacent to the Marsden Pt site.
Meanwhile, a petition has garnered more than 17,700 signatures calling on the Government to help save the Marsden Pt 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 is the case at present, to sell fuel in the country.
The decision to shut down the refining operation at Marsden Pt has been made by the shareholders purely in the interests of generating larger profits from imported refined product and not in the interests of New Zealand's strategic fuel needs, he said.
