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Record gas use signals boost for Refinery

Record gas use signals boost for Refinery


A record-breaking consumption of natural gas at the Marsden Point refinery is driving product yields and lifting refining margins.

Figures compiled by Refining NZ show that in the last two months the Northland based refiner used 570 TeraJoules (TJ) of natural gas (over 12,000 tonnes), an increase of 10 percent over the corresponding period a year ago and the highest ever use of gas in any two month operating period.

Refining NZ had forecast that an increased use of natural gas across the year would improve its Gross Refiners Margin (GRM) by USD 0.11 per barrel. The increased use in the May/ June period is worth an additional USD 0.12 per barrel to the refiner.

Chief Executive Officer, Sjoerd Post described the gas “statistics” as another step forward in a series of initiatives expected to add USD 0.66 per barrel to Refining NZ’s Gross Refining Margin.

“We are yet to project the impact of this increased usage across the remainder of the year, but the strength of the May/June figures indicate that we are well on the way to achieving the forecast uplift in our margin of USD 0.11 per barrel.

“We’ve been pushing hard to increase our supply of natural gas, which is critical to the mix of fuels we use in the refining process. With a better supply of cheaper, cleaner natural gas we can free-up fuels from processing to be sold as product - part of our strategy to lift revenue by producing more of the high value fuel products – and at the same time improve our CO2 profile.”

Post said there is a seasonal element to the increase, with supply improved by the fall-off in dairy processing over winter, but added that the increase also pointed to changing fundamentals in the gas market.

“Refining NZ has been working with its gas suppliers, other major gas users and the sector to improve access and allocation of natural gas on the northern pipeline.”

“In addition, we understand that re-negotiation of power-station gas supply contracts has improved available capacity on the pipeline.

“This is extremely encouraging for the refinery because it adds impetus to our efforts to optimise production and “opens the door” to further discussions with industry around what other steps might be taken to boost our supply of natural gas“, he said.

ENDS

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