Refining NZ has confirmed that its 135,000 bpd Marden Point refinery, will be converted into an import terminal.
The plan was first announced in August 2020, partly in response to low margins due to refining overcapacity in the Asia Pacific region, after major maintenance had been postponed as a result of the COVID-19 pandemic. Refining NZ received a shareholder mandate in August 2021 for the plan and has now entered into long-term agreements with its three existing customers – BP, Mobil, and Z Energy – for the provision of import terminal services.
The Refining NZ board has now made the final investment decision (FID) to proceed with the conversion, and agreed to change the company name to Channel Infrastructure from April 2022, when import terminal operations will begin.
As well as the export terminal deals with existing customers, Refining NZ has also executed long-term deals to provide dedicated private storage, which it has identified as a ‘complementary growth opportunity’ to give customers product supply scale and flexibility. The company will invest an initial NZ$30 million (€18.5 million) for the necessary works to offer this, with capacity progressively made available from when the terminal begins operating to early 2023. The investment is expected to result in a revenue of NZ$50 million over ten years. The company management is also consulting with customers to offer additional private storage and developing funding plans. It could invest a further NZ$25 million, which is expected to generate revenues of a further NZ$60 million over ten years.
‘Today is a momentous day in the journey to transition our business from operating as a refinery to an import-only fuel terminal. After 60-years of operations as New Zealand’s only oil refinery, we look back on the past with pride and look to the future with confidence that our business will continue to contribute to our community, and New Zealand, long into the future,’ says refining NZ CEO Naomi James.
James praised the efforts of the refinery’s staff during 18 months of the strategic review, refinery simplification, lockdowns and preparations for conversion, and pledged to support them in finding new employment or training opportunities.