Bad batch could hit thousands of travellers due to fuel shortage

A quality deviation in jet fuel shipped into Marsden Point that could affect air travel was the first such problem detected since the refinery closed, the company managing the import terminal said.

An “off-specification” load of about 25 million litres of jet fuel supplies had to be returned to an overseas location for re-processing following recent testing at Marsden Point, prompting fuel rationing to be imposed out of Auckland Airport.

While major customers Air New Zealand and Jetstar say they haven’t had to change schedules yet, the supply glitch is another frustration for airlines rebuilding after a tough three years and coming into an extremely busy holiday period where fuel uptake at Auckland doubles.

Yesterday, the Government said it was investigating whether the requirement to hold minimum fuel stocks could be brought forward from an implementation date of 2024.

A spokeswoman for Channel Infrastructure, formerly Refining New Zealand, said the off-specification was immediately flagged with fuel companies, and work on a product correction plan was begun.

“This is the first time where a quality deviation has been detected on an import into the Marsden Point terminal that has required a portion of the import volume to be returned to an overseas location for reprocessing,” she said.

Fuel companies Z Energy, BP and Mobil control how much of each fuel product is held in stock at Marsden Point at any one time.

At no point will fuel that does not meet New Zealand fuel regulations be distributed further along the fuel supply chain. Spokeswoman for Channel Infrastructure, formerly Refining New Zealand

“At no point will fuel that does not meet New Zealand fuel regulations be distributed further along the fuel supply chain, and our stringent testing and regulatory regime is designed to ensure this remains the case, regardless of the source of the fuel,” the spokeswoman said.

The company’s fuel testing business, Independent Petroleum Laboratories (IPL), undertakes routine fuel testing for a range of customers throughout New Zealand and the South West Pacific.

“Fuels are tested at multiple points along the supply chain, including at the point of manufacture, at the loadport, at point of discharge, prior to injection into the pipeline to Auckland, and at the receipt point in Auckland, and also at the airport.

“At Marsden Point, we apply a stringent testing regime, as agreed with all of our customers, and in accordance with standard [global] industry practice.”

Whangārei-based Social Credit Party leader Chris Leitch said the jet fuel rationing vindicated his party’s campaign to get the Government to keep the refinery operational.

His party submitted a petition to Parliament with 18,000 signatures, calling on the Government to declare the refinery a national strategic asset and for it to compulsorily buy all the shares from the private owners using money created by the Reserve Bank.

Leitch said the oil companies that owned Channel Infrastructure have been allowed to make a purely profitbased decision to close the refinery down.

“That decision will now cost airlines and their customers massive additional costs and major disruptions as fuel rationing bites close to Christmas.

“Even Australia was not stupid enough to allow closure of all its refineries, but ensured two remained operational and were actually upgraded to somewhere near the standard of our own, which produced high-quality jet fuel, to ensure it could cope with just such an event as substandard fuel.

“The assurances of the oil companies that they could guarantee security of supply for New Zealand have been proven hollow — exactly what Social Credit said at the time was the case, and New Zealanders will be footing the costs.”

A report for the Ministry of Business Innovation and Employment from consultants Hale and Twomey in 2020 warned that without refining capacity at Marsden Point, there was no capability to reprocess an off-spec shipment at Marsden Point.