Refining New Zealand says it is continuing to evaluate changing Marsden Point from a refinery into a fuel import terminal only.
Tanker unloading at Marsden Point Oil Refinery in 2013. Photo: Rafael Ben-Ari/Chameleons Eye/ 123RF
The company has released the first stage of a strategic review of its operations, which it began in early April, as low oil prices and cheap supply from Asia hit refining margins.
It said it will now develop plans to simplify refinery operations and reduce operating costs in order to improve the near-term viability of the business.
The company said it will focus on fuel supply into Northland and Auckland where it has a competitive advantage due to the refinery and pipeline to Auckland.
Refining New Zealand Chief Executive Naomi James said the company has narrowed down its options to making it as competitive as possible and exploring the possibility of changing to a import terminal..
''We are focused on making the refinery as competitive as we can in the short-term so that we can extend both cash-neutral operations into the next year and in parallel we will further evaluate and explore with our customers the potential for a future transition to an import terminal.''
Naomi James said if the refinery was to become an import only facility then it would mean a downsizing of the facility.
''Part of the next stage of work will be to work with government and other stakeholders to develop a planned approach to those transitions we have in front of us, whether it be a simplification or a later date a transition to an import terminal.
''What we will look at through the next stage is what's the potential to reuse or re-purpose refinery facilities in a scenario where we are no longer refining fuel locally,'' she said.
James said the company has acted quickly to stop the cass losses from the refinery which has enabled it to continue operating through Covid-19.
''We now need to extend these measures beyond the short term by simplifying our refinery operations.''
She said any transition to an import terminal will first include discussion with its commercial customers and shareholders.
She has ruled out a complete shut-down of the plant.
''There would still be a need for that infrastructure to supply the New Zealand market.''
''There is no scenario where Refining NZ ceases to exist.''
One of the refinery's big shareholders, Z Energy said it believes moving to an import terminal model is the best outcome for the refinery and New Zealand