NZ Refining approves import terminal conversion plan

Shareholders of the operator of New Zealand's sole 135,000 b/d Marsden Point refinery have voted in favour of converting it to an oil products import terminal, which is proposed to be operating from mid-2022.

A total of 222.23mn shareholder votes approved the plan and 1.92mn votes were against, Refining NZ said.

The conversion was proposed in April last year when Refining NZ was affected by a dramatic slide in refinery margins following the impact of Covid-19 on transport fuel demand, particularly jet fuel. Marsden Point will continue to supply jet fuel with a dedicated pipeline to the country's largest airport in Auckland.

Refining NZ is targeting a final investment decision (FID) on the import terminal around the end of the current July-September quarter, with a target for transition by mid-2022, said Refining NZ chairman Simon Allen. It already has commercial agreements with BP and domestic fuel marketer Z Energy for operating as an import terminal. Refining NZ is still in discussions with ExxonMobil but expects to have an agreement completed before the FID. BP, ExxonMobil and Z Energy own a combined 43pc of Refining NZ.

Fuel will be stored at Marsden Point in existing tanks with 180mn litres (1.13mn bl) of storage capacity, which will be the largest fuel terminal in New Zealand. The import terminal proposal will have capacity to provide additional storage if required, said Refining NZ chief executive Naomi James.

Refining NZ has followed the trend in Australia where two of the country's four refineries have either closed or about to close this year. BP closed in March the 146,000 b/d Kwinana south of Perth in Western Australia, while ExxonMobil plans to shut the 90,000 b/d Altona in Victoria later this year.

By Kevin Morrison