Maritime Union says ministers hearing its concerns over axing of coastal tankers

Saturday, 12 February 2022

Kokako and Matuku ferry fuel around NZ but could be used to import fuels from further afield in a crisis, says Maritime Union.

The Maritime Union says ministers are hearing its concerns that axing the country’s two coastal fuel tankers could result in fuel shortages and higher prices for motorists down the track.

National secretary Craig Harrison said those risks were increasing as the Ukraine crisis prompted countries in Europe that are reliant on Russia for energy suppliers to book more tanker capacity to import fuels from further afield.

Harrison said the union met with Deputy Prime Minister Grant Robinson on Friday and had another meeting planned with Energy Minister Megan Woods.

Coastal Oil Logistics, which is jointly owned by Z Energy, BP and Mobil, currently uses two ships, Kokako and Matuku, to transport refined fuels from the Marsden Point oil refinery to nine other ports around the country.

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RNZ's podcast The Detail looked in August at the history of Marsden Point, and why some people were warning that closing it could put the country's fuel security at risk.

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But the three oil majors plan to switch to a different business model once the refinery closes in April.

That will see them relinquish the two coastal tankers and import pre-refined fuels to Marsden and to those other ports direct from overseas.

Z has forecast the new model will see about 175 tankers visit the country annually and says that will improve the resilience of the industry’s supply chain.

It said in a December report that fully laden “medium-range tankers” – ones capable of carrying 50,000 tonnes of fuel or more – would be able to drop off fuel at Marsden, Mt Maunganui and Lyttelton.

Then having partially discharged at those larger ports, they could carry smaller cargos to the other ports “ensuring a flexible and more efficient coastal supply of fuel”, it said.

Harrison said the Government could not rely on assurances from the fuel companies that would work in practice.

He said it would be safer to continue to use the two coastal tankers to distribute fuels from Marsden, using that as a hub, particularly in light of the Ukraine crisis.

“Everybody will be reserving their tankers to look after the Northern Hemisphere,” he said.

“We think with something so important we shouldn’t just trust the word of Z.”

The market for tanking capacity was becoming tighter and a Lloyds report showed more new tankers were large ships with a deadweight over 60,000 tonnes that would not be economic for coastal distribution and were too large to visit some New Zealand ports, Harrison said.

The use of many smaller tankers to import fuel would increase carbon emissions from shipping, he said.

Coastal Oil’s two coastal tankers had separately proved their worth as additional storage capacity when they were moored off Marsden Point to store aviation fuel when the Auckland fuel pipeline broke in 2017, Harrison said.

The two tankers could also be used to pick up refined fuels from refineries in Australia and Asia in a shipping crisis, he said.

He said the two tankers employed a total of 80 crew.