By Gavin Evans
Jan. 17 (BusinessDesk) - Record throughput in the final six months of 2018 has helped the New Zealand Refining Company recoup some of the losses from its extended shutdown earlier in the year.
The company’s refinery at Marsden Point processed 22.56 million barrels of oil in the second half of last year, 4 percent more than a year earlier and an all-time record for the period.
That left total throughput for the year at 40.44 million barrels, 3 percent less than the year before. Volumes in May and June were roughly halved during the site’s biggest shutdown in 15 years.
The firm's shares were recently unchanged at $2.39. They have fallen about 9 percent in the past year.
The plant at Marsden Point is the country’s only oil refinery and produces about 70 percent of the petrol, diesel and jet fuel used in New Zealand. It is 43 percent-owned by Z Energy, BP and Mobil, and charges those customers processing fees based on refining margins in Singapore.
Those fees fell to $258.7 million for 2018, $70 million less than the year before, reflecting lower regional margins for most of the year and the loss of production from the longer-than-expected shutdown.
Average margins fell to US$6.31 a barrel from US$8.02 the year before, when the company reported a full-year profit of $78.5 million. That was on $411.7 million of operating revenue, including almost $82 million from the plant’s distribution activities, natural gas recovery and leases.
In August the company reported a $2.8 million first-half loss and said the shutdown would reduce full-year profit by about $43.2 million.
The firm, which trades as Refining NZ, has a raft of upgrade projects underway since completing the installation of the $365 million continuous catalytic regeneration unit in late 2015. It continues to invest to ensure it remains competitive against larger, more modern refineries its customers can also buy product from.
With no major shutdowns planned in 2019, the company has previously signaled it could process a record 44 million barrels this year. The current record was 42.67 million barrels in 2016.
One of the projects the refinery is preparing is dredging to deepen and straighten the shipping channel at the mouth of Whangarei harbour. That will reduce refining costs and risk by enabling crude deliveries on fewer, but larger, tankers.
Last month the Environment Court agreed minor changes to the consents for the work after the company challenged turbidity standards and limits on when in the year the work could take place.
The company said no date has been set for the work, which requires at least 12 months of monitoring to establish turbidity baselines beforehand.