Z looks for savings with increased storage
Z looks for freight savings with increased storage at Lyttelton, Tauranga ports
April 19 (BusinessDesk) - Z Energy, the petrol retailer whose owners are mulling a listing later this year, wants to reap significant savings in freight costs as it spends $40 million to boost storage at ports in Lyttelton and Tauranga.
The announcement coincides with today's official opening of a new 10.4 million litre storage tank at the Port of Tauranga by Terminals NZ, a branch of the transport fuels businesses owned by low-cost competitor Gull.
Wellington-based Z received resource consent to add 25 million litres of storage at Port of Lyttelton in Christchurch to its existing 30 million litre capacity, and is in early engineering and consent stages for the Port of Tauranga, Z said in a statement. The increased storage means Z should be able to maintain security of supply and avoid a repeat of the diesel shortage in the South Island last month.
"This additional tankage will start to address some of the infrastructure deficit that has developed over the last 20 to 30 years and enable a more secure and reliable supply of fuel to New Zealand," chief executive Mike Bennetts said. "It will also enable Z to procure larger shipments of imported goods that will lower freight costs."
Petrol prices have been falling at the pump in recent weeks and are at their lowest since July last year as a strong currency and weaker global demand for oil keep the major players fighting for market share.
Bennetts threw his support behind Port of Tauranga's announcement last month that it can widen and deepen its shipping channels, saying bigger vessels "can make for significant savings in freight."
Earlier this year, Z's owners Infratil and the New Zealand Superannuation Fund is considering floating between 40 percent and 60 percent of the petrol station chain after buying it at an attractive price in 2010.