Marsden Pt Refinery should not be taking its last crude oil shipment, workers say

Wednesday, 9 March 2022

Energy Minister Megan Woods says stopping refining won't increase fuel supply risks.

Workers are “very disappointed” New Zealand's only oil refinery has taken its last crude oil shipment, at the same time as refining margins are up and the volatility of oil markets has been exposed by the war on Ukraine.

Refining NZ, at Northland's Marsden Point, is unloading the milestone crude on Wednesday, after the ship Torm Ingeborg arrived on Tuesday.

Once the last of the crude is processed over the next week, the refinery shutdown will begin and the company will move to a fuel import terminal, changing its name to Channel Infrastructure on April 1.

Refining NZ is taking its last shipment of crude oil from the ship Torm Ingeborg, with the Marsden Point site moving to an import fuel terminal.

The shutdown will result in the loss of 240 of the company’s 310 jobs, though some displaced workers will be kept on for up to two years.

**READ MORE:

The last crude oil shipment marks the last refining to be done in New Zealand, with refined fuel now being imported.

* 'Devastated' workers and Northland leaders upset with oil refinery closure

* No last minute reprieve for Marsden Point oil refinery

Refinery worker and Fire Union delegate Aaron Holrowd says the end is coming while refining margins are up. (File photo)

* What is the Refining NZ vote and what does it mean for oil industry and Northland?

A further 80 to 160 full-time contractor roles will also be cut in the closure, and the shutdown will spell the end of annual maintenance contracts, where up to 700 people are brought on site.

Refining NZ chief executive Naomi James says the company has a proud legacy of supplying New Zealand with the fuel it needs and it will continue to have a critical role in keeping the country moving. (File photo)

Refinery worker Aaron Holrowd, who is First Union’s delegate at the site, said coming to the end of the refining business was very disappointing.

“We're coming to the end when the business would be the most profitable manufacturer in the country, as refining margins are huge.”

But Holrowd said the company’s owners were intent on closing the refinery, and talk of biofuels manufacturing had stalled without a heavy Government subsidy.

Petrol prices have hit the $3 mark at some petrol stations around Auckland, as the war on Ukraine puts pressure on oil supplies. (File photo)

Most of the workers had been able to find other jobs which used their skills, but a number of younger workers were moving to Australia, or at least out of Whangārei, he said.

“It’s a booming labour market; lots of people like me have a trade and technical background, and will find some sort of work.”

Whangārei MP Dr Emily Henderson says the last crude shipment is a sad moment for Whangārei, but it will not impact New Zealand's fuel security. (File photo)

Being over 60, Holrowd planned to semi-retire while doing contract work.

In a statement, chief executive Naomi James said the final crude ship marked an important milestone in the closure of the refinery after 60 years.

The company was now focused on the safe shutdown of the refinery, and supporting workers through the transition, she said.

The last crude oil delivery, from the ship Torm Ingeborg, will be marked with an event for invited guests on Friday.

First Union also said the refinery closure was unwise, as it left New Zealand dependent on overseas supply of refined oil.

Transport, logistics and manufacturing secretary Mark Muller said the international sanctions against Russia – a major oil producer – showed how things can suddenly change.

“A severe scenario could see major impacts on New Zealand supply disruption lasting for six months or more,” he said.

But the Government had looked at fuel security and was confident there would be adequate supply, Whangārei MP Dr Emily Henderson, who is part of the refinery’s transition working group, said.

“It’s not like we’re really changing the nature of importation here – we were importing crude oil, now we're importing refined fuel.”

New Zealand held supply overseas and the international situation was well set up, Henderson said.

In response to the war on Ukraine, New Zealand agreed to release some of its oil reserves.

But Henderson acknowledged the last crude oil shipment was an unhappy milestone for Whangārei.

“The refinery has been part of our fabric for so long, it’s a sad moment in many ways.”

Henderson admitted Refining NZ had left Northland in the lurch by shutting down sooner than expected, which meant alternatives like biofuels manufacturing were not ready yet.

But she was excited about a pilot started by Transpower which could see Northland become the country’s first Renewable Energy Zone, where renewable electricity could be “exported” to Auckland.

Calls to boycott refinery celebration

Meanwhile, a party for invited guests on Friday, to celebrate the refinery’s proud legacy, has been called hypocritical and insensitive by Northlander Chris Leitch, the leader of political party Social Credit.

The event was an insult to the workers who were losing their jobs, as well as the Northland businesses who would face additional economic stress due to the refinery's $800m yearly income no longer being spent in the community, he said.

Leitch was calling on invited guests to boycott the event, but Henderson said she would be attending without issue.

Holrowd said workers might have their own events to share a few drinks, but not with management.

“It's quite acrimonious – they’re the destroyers as far as we're concerned.”