Z Energy to delay airport spend
Investment plans to increase fuel security at Auckland Airport may be delayed because of the coronavirus pandemic and the collapse of air travel.
Z Energy is reviewing plans it made in the wake of the Auckland pipeline outage to build up fuel storage facilities at the airport.
It is understood Z Energy and other fuel companies believed an investment of tens of millions would be needed to implement the recommendations of the government inquiry into the 2017 Auckland fuel pipeline outage.
The inquiry recommended in September that fuel firms should build sufficient jet fuel storage at the airport for it to operate for 10 days at 80 per cent capacity.
The inquiry team recommended that if fuel firms didn’t firm up their plans by the end of next month, the Government should step in. Z spokeswoman Victoria Crockford said the company was reviewing its commitments to invest in additional fuel storage at the airport ‘‘in the short term’’.
She said that after the global financial crisis it took New Zealand until 2015 for jet fuel demand to bounce back to its 2008 level. ‘‘We remain committed to scoping a medium- to long-term investment. This is under discussion with our joint venture partners and other stakeholders.’’
Energy Minister Megan Woods indicated she was relaxed about some delay, saying: ‘‘I acknowledge that some investment plans may currently be under review in light of the very significant impact Covid-19 is having on the aviation sector and the fuel sector.’’
Jet fuel is currently pumped to the airport and petrol pumped to Auckland from Refining NZ’s refinery at Marsden Point. But Refining NZ is reviewing the future of its refinery because of a steep fall in its profit margins.
One of the options under consideration appears to be for Refining NZ to close its refinery at Marsden Point and instead switch to importing fuel that has already been refined. Refining NZ spokesman Greg McNeill said he could not comment on whether the review might also have implications for the use of its fuel pipeline or the recommendations of the inquiry.