Wednesday 18th September 2019
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Processing margins at the Marsden Point oil refinery jumped to an 18-month high after the closure of a key US refinery and unplanned outages at plants in Asia.
Refining NZ says it earned an average US$7.10 on each barrel of crude oil it processed in July and August. That was up from US$4.36 in May and June, and US$6.86 a year earlier. It was the highest gross margin the refinery reported since early 2018.
That saw the firm’s processing fees jump to $56.2 million, from $32.2 million in the preceding two months and $54.3 million a year earlier.
Its shares fell 0.5 percent to $2.09, taking their loss this year to almost 8 percent.
Marsden Point makes about three-quarters of the country’s petrol, diesel and jet fuel, processing crude oil imported by the three largest fuel companies, which collectively own almost 43 percent of the business. Its fees are based on margins of similar refineries in Singapore and it competes against larger, more modern refineries in Asia which its customers also source fuel from.
Refining NZ says the shutdown of the Philadelphia Energy Solutions plant in that city, and reduced gasoline production in Asia, saw inventories in Singapore fall below their five-year average and pushed margins from making gasoline to a 10-month high. Margins on diesel were also strong in both July and August.
The Philadelphia plant was the largest and oldest on the US east coast and could process 335,000 barrels a day. It stopped processing in June after a fire and has since been shut.
Marsden Point can process about 116,000 barrels a day. Throughput in the eight months ended August totalled 28.6 million barrels, up from 25.5 million barrels in the same period last year, which had included a major maintenance shutdown.
Total processing revenue for the eight months came to $173.5 million, up from $151.6 million in the same period last year.
Last month, Refining NZ reported a $3.5 million first-half loss due to weaker margins earlier in the year, natural gas shortages and additional costs from two government inquiries.
Today the company said supplies from the offshore Pohokura gas field have improved and prices have fallen more than 10 percent compared with the May-June period.
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