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CORRECT: NZ Refining hydrocracker upgrade gains lag estimate

(Fixes tense in fourth paragraph to show shutdown work was completed in April)

By Suze Metherell

June 17 (BusinessDesk) - New Zealand Refining, the Marsden Point oil refinery controlled by its major customers, says upgrades to its hydrocracker have boosted efficiency even as it misses its original forecast margin.

New Zealand's only oil refiner refitted its mild vacuum column as part of an efficiency drive to bolster margins and increase diesel production. It had forecast the refit, which boosts separation efficiency, would result in a 13 US cents per barrel margin, but said the "current weak margin environment" meant the step-up was closer to 11 US cents.

"This is just one component stream in our processing, it is an important first contribution to the series of initiatives aimed at lifting the performance on the hydrocracker which taken together, are expected to add 66 US cents per barrel to Refining NZ's gross refining margin," chief executive Sjoerd Post said in a statement.

The company, which is majority-owned by BP New Zealand, Mobil Oil NZ, Z Energy and Chevron New Zealand, had worked closely with customers on supply planning and monitoring stock levels during the shutdown this year, managing 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.

The shares rose 1.8 percent to $1.72 and have declined 18 percent this year.


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