Refining NZ shareholders vote to close Marsden Point refinery, transition to import-only fuel terminal

Shareholders of the New Zealand Refining Company have voted almost unanimously in favour of approving the company's transition to becoming an import-only fuel terminal.

Refining NZ has been New Zealand's only oil refinery since it was established in 1961, but after a decline in refining margins the company initiated a strategic review of the business in April 2020.

Shareholders voted on Friday to determine the future business model and capital structure, with CEO Naomi James confirming the results this afternoon.

She said there was strong support for the proposal, with 99 percent voting in favour of transitioning to an independent fuel infrastructure company.  

The import-only fuel terminal will operate under the name 'Channel Infrastructure' and the target for transition is mid-2022. 

The Board will now make the final investment decision and will begin planning the transition.

James said the company plans to utilise the deep-water harbour and jetty infrastructure of Marsden Point to import refined fuel which will be stored at the Marsden Point site in existing tanks. 

"This is a major milestone for Refining NZ and takes us a step closer to our new business.  Channel Infrastructure has a vision to be New Zealand's leading independent fuel infrastructure company that utilises Marsden Point's highly strategic assets for the benefit of our community, and all New Zealanders," James said.

She said it was the beginning of "a new chapter" for The New Zealand Refining Company.

"This change will give our company a long-term future, and while this change will have little impact for most New Zealanders, it is a major milestone for our workforce and wider community.  We have been working hard to put in place the plans needed to support a smooth transition for our people and their families, our community, and the Northland region." 

Board chairman Simon Allen noted he wanted to thank people from the wider Northland region, including iwi partners, who had engaged with the company during the strategic review process over the past 16 months.

Refining NZ confirmed the commercial terms presented reflect the in-principle agreements they have reached with Z Energy and bp and they form the basis of ongoing negotiations with Mobil.  

James said they are working to conclude a binding agreement with all three customers before a final investment decision is taken by the Board around the end of Q3.  

Energy Resources Aotearoa said the decision to close the Marsden Point refinery was understandable but disappointing.

"This continues a worrying trend of de-industrialisation and job losses in the regions," chief executive John Carnegie said.

"While there are many domestic and global factors at play, the high cost of energy has been an element in all of these decisions."

Carnegie said he was worried "things will only get worse" as New Zealanders need more energy but economic and reliable renewable alternatives are not yet available.

"We all want to see a smooth transition to lower emissions, while protecting local jobs and keeping energy affordable and reliable."

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