April closure sealed for Marsden Pt oil refinery
Refining NZ has confirmed its decision to close the Marsden Point oil refinery, which will shut down in April.
The company yesterday announced its board had signed off on its transition to a business that will instead help distribute pre-refined fuels imported from overseas.
The closure will result in the loss of 240 of the company’s 310 jobs, though some of the displaced workers will be kept on for up to two years, a spokeswoman said.
It had become increasingly apparent since Refining NZ announced a review of its refinery operations in April last year that the refinery was destined for closure. Its oil company shareholders, including Z Energy, had been pressing for change amidst a collapse in refining margins.
The company’s shareholders voted to approve the closure in August and the company had been expected to confirm the decision around the end of September. But negotiations with Mobil are understood to have taken longer than expected to conclude, giving faint hope of an alternative outcome.
A Cabinet paper released in November revealed that Energy Minister Megan Woods had been willing to consider trying to save the refinery by underwriting its operations for a period of up to 10 years but that the option did not get the support of fellow ministers.
Critics of the closure have expressed concerns it could reduce New Zealand’s fuel security, but that risk has been played down by Refining NZ and the Government, which have argued the country is already reliant on crude oil imports.
The change will see Refining NZ switch to an import-only fuel terminal business called Channel Infrastructure .
Work to safely shut down and decommission the refinery was ‘‘well advanced’’, the company said in a statement.
Chief executive Naomi James said the decision would have ‘‘a huge impact on our people, and our community’’.
‘‘We are implementing a range of transition support measures to assist those who will be moving on to other employment after we transition,’’ she said.
The First Union said in October that the end to refining in New Zealand would result in a net rise in global carbon emissions.
It said its analysis suggested that refined oil from South Korea, which it said was New Zealand’s largest source of refined oil during the past two years, resulted in 16 per cent to 38 per cent more emissions than refining at Marsden Point, not taking into account ‘‘likely higher transport emissions’’.
But Refining NZ has disputed that, saying its assessment is that the Marsden refinery was more emissionsintensive than the ‘super refineries’ New Zealand was likely to be supplied with in future.
Industry sources have suggested that the end to refining will free up about 5 per cent of the country’s gas production for other uses.