Marsden Point processing record

Record throughput in the final six months of 2018 has helped the New Zealand Refining Company recoup some of the losses from its extended shutdown earlier in the year.

The company’s refinery at Marsden Point processed 22.56 million barrels of oil in the second half of last year, 4 per cent more than a year earlier and an all-time record for the period.

That left total throughput for the year at 40.44 million barrels, 3 per cent less than the year before. Volumes in May and June were roughly halved during the site’s biggest shutdown in 15 years.

The firm’s shares traded yesterday at $2.41. They have fallen about 9 per cent in the past year.

The plant at Marsden Point is the country’s only oil refinery and produces about 70 per cent of the petrol, diesel and jet fuel used in New Zealand. It is 43 per cent-owned by Z Energy, BP and Mobil, and charges those customers processing fees based on refining margins in Singapore.

Those fees fell to $258.7 million for 2018, $70m less than the year before, reflecting lower regional margins for most of the year and the loss of production from the longer-than-expected shutdown.

Average margins fell to US$6.31 a barrel from US$8.02 the year before, when the company reported a full-year profit of $78.5m. That was on $411.7m of operating revenue, including almost $82m from distribution activities, natural gas recovery and leases.

In August the company reported a $2.8m first-half loss and said the shutdown would reduce full-year profit by about $43.2m.

The firm, which trades as Refining NZ, has a raft of upgrade projects under way since completing the installation of the $365m continuous catalytic regeneration unit in late 2015. It continues to invest to ensure it remains competitive against larger, more modern refineries.

With no major shutdowns planned in 2019, the company has signalled it could process a record 44 million barrels this year. The current record was 42.67 million barrels in 2016.