Sharechat Logo

The New Zealand Refining Company Limited (NZX: NZR) Refinery Simplification Update

Thursday 17th December 2020

Text too small?

Refining NZ advises that Z Energy has issued a notice of dispute under its Processing Agreement with Refining NZ in relation to Refining NZ’s plans to simplify the Marsden Point oil refinery operations.

Refining NZ has also issued a notice of dispute under the Processing Agreement to Z Energy in relation to a separate claim by Refining NZ that the Fee Floor should be $70M per annum higher.

As advised in previous announcements, Refining NZ has developed plans to enable it to continue to operate the refinery in 2021 at the lowest cost possible and run cash neutral, maintaining reliable fuel supply for the New Zealand market while continuing to meet its obligations under the Processing Agreement.

Under the terms of the Processing Agreement, customers take the risk of periods of low margins and demand through the Fee Floor structure which provides a fixed amount of revenue to Refining NZ, independent of actual throughput.

Refining NZ’s simplification plans result in the refinery returning to similar overall capacity levels as existed at the time the Fee Floor was set on commencement of the Processing Agreement. Refining NZ is confident that its simplification plan complies with the terms of the Processing Agreement and intends to continue to act within the terms of this agreement while working through the dispute resolution process with Z Energy for both disputes. Refining NZ is discussing with Z Energy its assertion that it intends to withhold payment of the Fee Floor pending resolution of the dispute.

Refining NZ has made good progress in discussions with other customers in relation to the potential future staged transition to an import terminal and these discussions continue. Refining NZ expects to provide an update to the market in January regarding its work to further develop and refine import terminal conversion plans, including estimated costs of conversion and timing and the status of ongoing customer discussions. The independent directors, who have been overseeing discussions with customers, continue to see significant unrealised value in Refining NZ’s infrastructure.

See the link below for more details:

Refinery Simplification Update

Source: The New Zealand Refining Company Limited

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

AFT Pharmaceuticals Limited (NZX: AFT) Maxigesic IV licensed in Eight New European Markets
My Food Bag Group Limited (NZX: MFB) Lists on NZX & ASX
Fonterra Shareholders Fund (NZX: FSF) Fonterra Lifts 2020/21 Forecast Farmgate Milk Price Range
Evolve Education Group Limited (NZX: EVO) Announces Acquisitions and Intention to Resume Dividend
My Food Bag Group Limited (NZX: MFB) L&Q Notice My Food Bag Group Limited
General Capital Limited (NZX: GEN) Equifax Affirms General Finance BB- Rating
Stride Property Ltd & Stride Investment Management Ltd (NZX: SPG) Appoints New General Manager Investment
Synlait Milk Limited (NZX: SML) FY21 Guidance Update
Z Energy Limited (NZX: ZEL) Announces Changes to Executive Team
Stride Property Ltd & Stride Investment Management Ltd (NZX: SPG) FY21 Third Quarter Dividends

IRG See IRG research reports