NZ Refining 2014 processing revenue may be crimped by as much as US$15M on extended shutdown

Sjoerd Post, New Zealand Refining CEO
New Zealand Refining 12-month price history (NZX.com)

New Zealand Refining [NZX: NZR], the Marsden Point oil refinery controlled by its major customers, may receive US$15 million less in processing revenue this year because of a glitch in its maintenance shutdown which means it will probably produce less than last year.

New Zealand's only oil refinery has extended by 10 days a planned maintenance shutdown of its hydrocracker and related units because of the failure of a key compressor unit during the hydrocracker start-up, the Whangarei-based company said in a statement. The company is replacing the failed component of the compressor and expects the hydrocracker to be back in production towards the end of next week, it said.

The extended shutdown is expected to reduce processing fee revenue by US$10 million to US$15 million as the company cuts its annual processing forecast for this year to 40.5 million barrels from an earlier estimate of 41.5 million barrels, and below last year's 40.6 million barrels, it said. NZ Refining, which began the scheduled four-week shutdown in the first week of March, had total revenue of NZ$223.2 million in 2013.

NZ Refining will continue to manufacture fuel products by using processing units that are not part of the shutdown and other processing units that have completed the planned maintenance, it said.

The company, which is majority-owned by BP New Zealand, Mobil Oil NZ, Z Energy and Chevron New Zealand, said it is working closely with customers on supply planning and monitoring stock levels during the shutdown as they manage fuel stocks via a combination of products from Marsden Point and scheduled imports. NZ Refining supplies about 80 percent of New Zealand's refined fuels.

Shares in NZ Refining fell 1.2 percent to $1.71, matching its low of a week ago.

(BusinessDesk)

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