Refining NZ has named the date for a shareholders meeting that will vote on a proposal to turn the country's only oil refinery at Marsden Point into an import-only facility.
If shareholders approve the move at the August 6 meeting in Auckland, Refining NZ will press ahead with plans to switch to an import-only model by the middle of next year. And it will change its name to Channel Infrastructure NZ.
A 160-page explanatory booklet released for the proposal says the current Refining NZ workforce of 300 is expected to reduce over the two years following commencement of import terminal operations to approximately 60.
"During this transition period, there will be an ongoing requirement for a workforce to support the shutdown and decommissioning of the refinery site, execution of the capital projects and other transition related activities. Workforce planning remains subject to employee consultation," the booklet says.
It makes no mention, however of contractors, of which there have been large numbers too.
The company has been moving towards this point since announcing a strategic review over a year ago.
The strategic review was prompted by a significant decline in refining margins as a result of excess refining capacity in the Asian region.
Refining NZ says the move to end refining will likely cost about $200-$220 million over five to six years, while demolition of the refining facilities will cost a further $50-$60 million and up to $60 million in additional capital investment may be required to convert tanks for private storage services.
The company's expecting to generate tax losses of $300-$350 million that will be potentially usable against future profits.
The new storage-only facility will accommodate 180 million litres of fuel, with a potential extra 100 million litres of private storage for customers.
The explanatory booklet says following the refinery closure, the Marsden Point site is "well situated for future opportunities".
"With a deep-water harbour (approximately 14 metre draught), proximity to the large Auckland market and a strong infrastructure footprint, the site is well placed for repurposing as a fuels and energy hub. Refinery assets will be assessed for their future potential use and may be mothballed rather than decommissioned, based on this assessment, and subject to risk mitigation controls."
The announcement of the shareholders meeting date follows Refining NZ reaching non-binding in principle agreement with bp and Z Energy on "key commercial terms". Negotiations are still under way with Mobil, however.
Refining NZ chief executive Naomi James said while the move to end refining was "not a significant change for most New Zealanders", a conversion to import terminal operations was a significant change for our operations and "for everyone at our Marsden Point site".
"A key focus for us over the coming weeks and months will be to support our employees and their families and work closely with our community to help lessen the impacts of this change."
42 Comments
House prices just keep on trucking in Ruakaka and the greater bream bay. Feels like you can buy today and flick tomorrow, make $50k. Sooo many AKL refugees bringing their million and making our $300k house $600k. Waipu Sections that were 200k 6yr ago, were 395k 12mth ago, 435k 6mth ago, 495k now. Yay. The land hasn’t improved, it still looks flood prone like 30yrs ago to me. New subdivisions in One Tree Point you get on a wait list for, 40 sites pre-sell to Housing Coys, corner ones left for regular Jo. I don’t think refining going will affect our Ponzi scheme, just the poor regular hard workers.
Would not be suprised if house prices go to the moon now that a major employer is closing.
May bring a new wave of buyers in EVs driving cashed up from Auckland now saying hey look the view is better now with the refinery gone,
At least locals can quickly cash up and move on I guess rather than be stuck in house with limited buyers or they may be unlucky if interest rates spike soon.
Kawerau losing a newspaper plant also last week. Will also lead to importing the useful residues from refining such as bitumen, sulphur. These will also need to be imported. Importing gives you more uncertainty and we will have to stock more material incase of supply chain disruption.
youngdumbandbroke,
While I am old, loquacious and quite well-off, so it's not surprising if we see things from different perspectives. I accept the reality of human influenced climate change, so what should NZ do? Of course, given our size, whatever action we take or don't take will represent only a rounding error globally, so perhaps we should do very little/nothing.
The problem i see with that -apart from a question of morality- is that it is likely to have adverse consequences from some of those with whom we wish to trade. Where we might agree is that I see no need for us to lead the pack. It may allow our politicians to strut the world stage, but we need to earn a living in order to pay for all the things we want.
For my generation at least, politicians have shown they know nothing about the people they claim to represent and would rather go after a vanity project to fluff their own nest than make tough decisions that will bring about change. We’ve become a society of instant gratification whether it be fast food, social media or cheap credit, and our lack of leadership is a symptom of this. No wonder we have a tone deaf government screaming climate change rhetoric from their ivory tower in Wellington while middle NZ struggles to get by each week. So in a way I envy you link. You lived through a period in NZ history that seems almost bliss compared to now.
Got myself a new horse and cart today and have found a local plant that has leaves that can been used in place of paper.
Have just got a new rainwater tank and am off the grid so safe for when we get new water charges.
I have wild goats and pigs over back fence so safe for meat supply since we will soon start taxing meat due to global warming.
Government is happy to let in super rich who will buy up much more assets and in return be looked after with our own PM who expects prices only to move up.
You will have nothing and be happy.
In a strategic sense it sure does but then this mindless "gesture government" has already set us on the road to import dependency as regards liquid fuel stocks. When Labour shut down our offshore petroleum exploration it meant our domestic oil reserves had to decline with zero chance of replacement. Jacinda listens to the Greens too much and thinks that EV's will fill the gap; yeah right! Air travel in this country is going to get very expensive with time.
Marsden point uses 31% of Northland's electricity - 230,000,000kWh per year. This is enough energy to run 100,000 EVs for 15,000km.
So Closing Marsden will reduce our coal usage too. Great for NZ but the refining that is done overseas will likely use more fossil fuels than doing it here.
Surely refining capability and physical storage are a core security issue for...any country or bloc. If we ever had major powers come to fisticuffs we'd need to be able to refine the SPR which is held in crude. At a push I'd far rather live without a national airline than starve as society rapidly collapsed without petrochemicals.
Just a ploy to extract more profit from a monopoly. Gull has to land their fuel in tankers at Tauranga and then truck 250 km to Auckland in tankers. They can still compete head to head on price with the other major petrol companies that use a common pool of fuel that lands at Marsden point refinery and is sent down a pipeline all the way to South Auckland and stored on-site at a NZ Refining terminal 30km max away from the majority of Auckland petrol stations. All 3 of those assets refinery, pipeline and Auckland terminal were practically gifted to those oil companies by the 4th Labour government. Ironically to protect the then 1500 jobs of refinery workers.
I am hoping this is good news for consumers. Marsden point is a very inefficient refinery, with all major oil players in cahoots, clipping the ticket. It puts an artificially lifted floor under fuel prices, not just for locally manufactured fuel but also imported ones to make up for the lack of capacity. After all, why would any one of them undercut themselves?
This has been allowed to happen for decades. No government has had the spine to call it what it is: a cartel.
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