NZ Refining approves $180m upgrade

By NZPA

Thursday 26th April 2007

New Zealand Refining has approved a $180 million upgrade at its Marsden Point refinery in Northland to increase output.

The planned upgrade, decided after several years' work and $30 million in studies, will increase the refinery's ability to process crude oil by 20%.

Output would rise by between 10% and 12% once the upgrade was complete in 2009.

The refinery processed on average around 3.2 million barrels of oil a month.

"Margins have been excellent over the last few years, so nearly everyone around the world is looking at expanding refining capacity," chairman Ian Farrant said.

The annual rate of return from the project is expected "in the high teens", based on a gross refining margin around $US5.20 and an average exchange rate of US58c.

The company -- 73% owned by BP, Mobil, Caltex and Shell -- will replace imported residue from other refineries with crude oil.

The refinery supplied over 70% of New Zealand's refined oil, around 60% of its petrol and over 75% of its required diesel and jet fuel.

NZ Refining shares were up 4c at $6.58, having traded between $6.00 and $8.15 in the last 12 months.

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