New Zealand’s sole refinery could be converted into an import terminal for oil products by 2022 as part of plans for a larger energy hub at the site, including an LNG terminal and battery storage site, operator Refining NZ said.
Refining NZ has made progress on plans for the conversion of its 135,000 b/d Marsden Point refinery although no final decision has been made, chief executive Naomi James said. The company said last year it was considering halting refinery operations because of low margins and regional oversupply.
The import terminal under consideration would come online by 2022 with annual capacity of 3 billion litres, Refining NZ said. This is equivalent to about 50,000 b/d, or less than 40 percent of Marsden Point’s refining capacity.
It would supply fuel markets in Auckland and Northland in northernmost tip of New Zealand’s North Island, which together account for 40 percent of the country’s fuel consumption.
Total one-off transition and conversion costs are estimated at around NZ$200mn ($144m) over 4-5 years, excluding refinery demolition costs of around NZ$50-60m. The refinery closure is also likely to lead to significant tax losses of an estimated NZ$350m.
If Marsden Point becomes an import terminal, the operating and capital costs of the facility would be around NZ$35m-40m, based on estimates of other recent refinery conversions in Australia and southeast Asia, said James, who inaugurated the review of refinery operations in April 2020, shortly after she became chief executive.
For more information visit www.refiningnz.com