Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Marsden Point makes margin gains with greater natural use

Marsden Point makes margin gains with greater natural use

By Pattrick Smellie

July 4 (BusinessDesk) - New Zealand's Marsden Point oil refinery is taking advantage of historically low wholesale prices for locally produced natural gas to improve its refining margins as electricity companies, in particular, continue to use far less gas than in the past.

Refining NZ said in a statement it had achieved a 12 US cents per barrel uplift in Gross Refining Margins in May and June, 1 US cent better than planned, and that the company was "well on the way" to achieving its targeted 11 US cents per barrel improvement from the natural gas initiative over the course of the financial year.

Gas was cheapest in winter months when the dairy industry, also a major gas user, was at its seasonal low point for milk processing.

Wholesale gas prices have plummeted in recent years as a combination of weak electricity demand and the commissioning of a string of renewable wind and geothermal energy projects have markedly reduced the use of natural gas and coal to produce electricity.

That trend has already seen Canadian methanol producer Methanex restart and expand its three Taranaki methanol production trains after mothballing them during much of the 2000s, when gas prices were high and shortages were feared.

The gas move is one of four initiatives the refinery is pursuing, targeting a 66 US cents per barrel improvement in gross refining margins, which have been low over the past year, owing to a global glut of refining capacity.

Using more locally produced natural gas to fire its plant allowed the refinery to send less of its own product "up the stack" as fuel for the refining process and "to send those fuels out the door (to market) instead," said Refining NZ spokesman Greg McNeill.

As a result, the refinery had increased gas use by 50 Terajoules to 570TJ's in May and June this year, compared with the same period last year.

The growth in gas use had also been assisted by improved access to the pipeline capacity, which has been a bugbear for would-be new industrial gas users in the upper North Island, with pipeline limitations causing bottlenecks.

"We understand that the renegotiation of power station gas supply contracts has improved available capacity on the pipeline," said Refining NZ chief executive Sjoerd Post.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news