Closure of Marsden Point oil refinery set to be put to shareholder vote

Tuesday, 25 May 2021

Hundreds of jobs would be lost at the refinery if it closes, and more in ancillary businesses in the Northland region and elsewhere.

Refining NZ has reached an “in principle” agreement with Z Energy on a deal that could see it close its Marsden Point oil refinery by the middle of next year and switch to importing refined fuels.

The company has previously reached a similar agreement with fellow shareholder and customer BP, and Refining NZ said it could put the proposal to a shareholder vote before the end of September.

A Refining NZ spokeswoman said the import terminal conversion proposal would need to be approved by 75 per cent of the votes cast.

The First Union has estimated the closure of the refinery and a switch to a model where Refining NZ will import pre-refined fuels would cost about 1100 jobs in Northland, including hundreds of jobs at the refinery itself.

* Plan to quit refining at Marsden Point could happen next year

* Z Energy to withhold payments to Refining NZ amid dispute

* Refining NZ proposes to cut 100 jobs as talks over longer term future of refinery continue

* Refinery closure would cost 1000 Northland jobs and push up fuel prices, says union

Many KiwiSaver funds have oil companies among their investments, though there are an increasing number of KiwiSaver funds that are fossil fuel-free.

Z and BP together own just over 25 per cent of Refining NZ.

Refining NZ said in a statement it had yet to reach an agreement with Mobil, which owns a 17 per cent stake in the company.

The closure of the refinery has appeared on the cards since last year, due to a collapse in refining margins which correlated with Covid and excess refining capacity in Asia.

Energy Minister Megan Woods has shown no sign of intervening.

She said in June last year that the Government had been assured New Zealand’s fuel supply would remain secure in the event of a closure and a switch to an import model as it could source fuels from “multiple refineries in multiple locations to minimise supply risks”.

Refining NZ chief executive Naomi James forecast the switch from refining to importing pre-refined fuels would involve “little change for New Zealanders”.

But she acknowledged it would be a big change for the company, its workforce at Marsden Point and the local community.

“A key focus for us is on how we support our people through this transition and work with central and local government and agencies to make this a well-planned and managed transition for our workforce and the region,” she said.

James said the company had been thinking about what other opportunities there might be for the refinery site.

“Marsden Point has huge potential being a large industrial-consented site, with deep water port access, large electricity and gas connections and a highly skilled workforce,” she said.