NZ Refining says pipeline leak to hit revenue by up to $15 million
By Paul McBeth
Sept. 18 (BusinessDesk) - New Zealand Refining, which operates the country's only oil refinery in Marsden Point, says a pipeline leak which has disrupted jet fuel supplies at Auckland International Airport will hit revenue by as much as $15 million.
The Whangarei-based company needs to replace a section of the pipeline between the refinery and the Wiri storage depot and will run the line at a reduced capacity, it said in a statement. That's expected to reduce pipeline income and constrain refining income, which NZ Refining says will hit revenue by $10 million to $15 million. The company generated annual revenue of $353.8 million in calendar 2016.
"Early identification and containment has minimised the environmental impact of the leak," the company said in a statement. "The recovery of the leaked product is almost complete. We have maintained close contact with our local community and are continuing to keep residents updated on progress with our repairs."
The leak has disrupted jet fuel supply at Auckland airport, prompting carriers to restrict fuel use by consolidating passenger numbers and cancelling flights. Energy Minister Judith Collins has offered NZ Refining and jet fuel suppliers Mobil, BP and Z Energy assistance if needed.
Z Energy today said its airline customers are already on fuel allocations, which will mean they have to bunker fuel and refuel at other domestic and international locations. Still, the transport fuels company said fuel supplies nationally were healthy and that the disruption won't "materially impact company performance".
NZ Refining shares last traded at $2.48 and have slipped 4.6 percent this year, while Z Energy shares closed on Friday at $7.31 having edged up 0.7 percent. Auckland airport shares were last at $6.31 having gained 1 percent this year and Air New Zealand stock closed at $3.25 having climbed 48 percent this year.