New Zealand’s 60-year-old oil refinery at Marsden Point, near Whangārei, will stop turning crude oil into petrol and diesel from April next year.
NZX-listed Refining NZ confirmed a final board decision to convert the site to importing and storing refined transport fuels under a new name: Channel Infrastructure.
The decision had been long anticipated and follows agreements last August with its three largest local shareholders: Mobil, Z Energy and BP.
The refinery closure follows a “significant decline in refining margins as a result of excess refining capacity in the Asian region”.
The refinery looked to its customer shareholders for top-ups when refining margins were too low to meet the costs of refining operations.
Similar trends are in play in Australia, where just two refineries are being subsidised by the Australian federal government to remain open until about 2030, one of them owned by Ampol, the suitor for Z Energy.
Skills released
The refinery closure will release a large number of the highly-skilled workforce into NZ’s tight labour market.
“We have some of the best talent in the country working on our site," said chief executive Naomi James. “I am committed to supporting them through this time to find new jobs or training opportunities – so they are ready to move to new jobs when we become Channel Infrastructure.”
The reshaped business would also provide dedicated private storage to customers.
“This is the first of several new growth opportunities we have identified for the future of Channel Infrastructure, and we look forward to providing further updates on other site repurposing opportunities in due course,” James said.
