NZ Refining margin squeezed by hydrocracker shutdown and maintenance

Tuesday 17th May 2016

New Zealand Refining's margins were squeezed by a planned shutdown of its hydrocracker unit and operational problems that needed repairing in the March/April period.

The Whangarei-based company's net refinery margin was US$1.84 a barrel in March/April, with US$2.88/barrel sliced off by the closure, and a further US$1/barrel reduced by the repair work, it said in a statement. That's the smallest margin since March/April 2014 when the refinery's hydrocracker unit last faced a shutdown, producing a margin of negative US$2.84/barrel.

"All units are now fully back in operation. Te Mahi Hou continued to operate well throughout the period," the company said. "The Singapore Dubai complex margin for the period remained strong at an average US$3.18 per barrel, supported by strong gasoline price spreads."

NZ Refining has benefited from cheap global oil and plans to dredge Whangarei harbour to allow heavier loads on tankers bringing crude oil to the refinery.

Today's figures show the refinery operator's throughput was 7.47 million barrels in the two-month period, up from 6.83 million in January/February and 7.41 million a year earlier.

The shares fell 1.4 percent to $2.75 and have slumped 26 percent so far this year.

BusinessDesk.co.nz

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