Refining NZ shareholders approve refinery closure
Refining NZ shareholders have voted overwhelmingly in favour of ceasing refining at the Marsden Point oil refinery in Wha¯ nga¯ rei.
The result of the vote had been a foregone conclusion, with fewer than 1 per cent of votes ultimately cast against the key resolution, but it spells a major change for the Northland economy.
The decision shareholders have approved will see Refining NZ switch to distributing pre-refined fuels that are likely to be imported from refineries in Asia and potentially Australia.
That is expected to result in the loss of about 240 of Refining NZ’s 300 jobs, and to cost hundreds more jobs among suppliers, but the company will continue under a new name.
The refinery is expected to close about the middle of next year.
Chief executive Naomi James said jobs would be lost over a period of about two years, though she said the ‘‘more significant reductions would happen earlier on’’.
Energy Resources Aotearoa (formerly the Petroleum Exploration and Production Association) described the vote as ‘‘understandable but disappointing’’.
‘‘This continues a worrying trend of de-industrialisation and job losses in the regions,’’ its chief executive, John Carnegie, said.
James acknowledged that many people would be uneasy with the decision and might consider it a step back for the country, for example in terms of self-reliance.
‘‘We really hear that concern . . . We know that a transition from refinery to import terminal is a question of when, not if. And based on the terms negotiated with customers, we believe now is the right time to make this transition,’’ she said.
The final decision to close the refinery is expected to be made by the company’s board before the end of September.
Speaking before the shareholder vote, Refining NZ chairman Simon Allen said the financial returns to shareholders from refining had not been satisfactory for some years. But the company could reflect on 60 years of refining oil with pride as it ‘‘looked to open a new chapter’’, he said.
Under the import model, fuel would be stored at the Marsden Point site in existing tanks at what would be the largest fuel terminal in New Zealand. Refining NZ would be renamed Channel Infrastructure NZ, Allen said.
‘‘We will continue quality fuel testing services both at the Marsden Point site and around New Zealand.
‘‘Fuel from Marsden Point would be distributed primarily to the Auckland and Northland markets through the 170-kilometre refinery-toAuckland pipeline and the truck loading facility located adjacent to the Marsden Point site.’’
Allen said the space that would be freed up by the closure of the refinery itself had ‘‘great potential’’ to generate jobs and economic activity for the Northland region.
James said options it was investigating included using the site to import, store or produce biofuels, including ‘‘sustainable aviation fuel’’ and hydrogen.
It was also looking at using the site for solar energy, she said.
Allen and James faced protracted questioning at the special meeting from individual investors who were unhappy with the decision and concerned about the country relying on importing pre-refined fuels.
One said they were not influenced by ‘‘smoke and mirror’’ costings that promised increased dividends to shareholders but were worried about the security of fuel supplies if all refining occurred overseas in Asia.
The country would have to rely on the ‘‘goodwill of China’’ not to impede the movement of tankers carrying fuel to New Zealand, she said.
Allen indicated that in one sense the change could improve the country’s fuel security as it would be importing fuels from a variety of refineries around Asia and would have ‘‘less exposure to the one single refinery’’ than it has now.
But he said Refining NZ stood ready to support additional measures to improve fuel security if the Government thought they were required.