29 April 2004

Refinery plans new co-generation plant

An allocation of carbon credits under the Government’s Projects to Reduce Emissions programme, announced today, has boosted the New Zealand Refining Company’s plans for a new electricity generation plant at the Marsden Point Refinery.

The New Zealand Refining Company General Manager, Thomas Zengerly, said if the new plant proved to be viable it would provide an efficient, independent and more environmentally sustainable source of energy both to the Refinery and to Northland from 2007 onwards.

“This is an exciting project that has the potential to create enough electricity and steam to meet all of the Refinery’s needs and give a significant boost to the country’s total generation,” said Zengerly.

“Both the local and regional councils are supportive of the project and there is already strong interest from potential customers regarding the plant’s surplus power,” he said.

Zengerly said the Government’s decision to award carbon credits had supported the Refinery to consider the project. The New Zealand Refining Company will decide by April 2005 whether or not to proceed with the project.

Zengerly said the viability of the project would hinge on external factors such as the availability and price of natural gas and biomass, which would be needed as fuels to top up the gas produced by the Refinery.

If it goes ahead, the Refinery’s Co-generation Facility will consist of two 42 megawatt gas turbines creating 690 gigawatt hours of electricity per year. The Refinery would use 290 gigawatt hours of that electricity, exporting 400 gigawatt hours back to other customers in the region.

The New Zealand Refining Company is developing the project with its preferred partner, HRL Limited, an Australian energy, technology and project development company.

Managing Director of HRL, Peter Lamell, said the company was excited by the project and the partnership with The New Zealand Refining Company.

“Our plan involves making the most efficient use of the available resources to generate electricity, including harnessing the heat from the turbine exhausts and using biomass to produce steam,” said Mr Lamell.

“This project has the potential to be an important contributor to the Refinery, to the environment and to both the local and national economy,” said Mr Lamell.

For further information contact: Thomas Zengerly, General Manager, New Zealand Refining Company: +64 9 432 8311 Peter Lamell, Managing Director, HRL Australia: +61 3 9565 9900

Background fact sheet

What’s new? The New Zealand Refining Company has been awarded 1.2 million carbon credits from the Government for its planned co-generation project. These credits have made consideration of this complex cogeneration project possible.

What’s the process?

Having received the credits, the New Zealand Refining Company can now begin to move to the next planning stage of the project. The company will decide by April 2005 whether to proceed with the project. The New Zealand Refining Company is working on this project with HRL Limited, an Australian energy, technology and project development company. The plant would be built, owned and operated by HRL, with a long-term contract to supply electricity and steam to the Refinery. The project is expected to require about $120 million of capital, based on the current estimates.

How does it work?

All of the gas from the refining operations will be used to power the new turbines. The turbines would also require about five petajoules of natural gas per year. The Refinery uses 1.2 million tonnes of steam per year in its refining operations. Under the new plan, heat from the new turbines will be recovered with new heat recovery steam generators, and converted to 860,000 tonnes of steam. A new multi-fuel fired boiler will be installed to produce the remaining amount of steam, with the Refinery’s existing boilers providing the balance and backup. This boiler can use biomass, asphalt or other solid fuels as energy source.

What is the New Zealand Refining Company?

The New Zealand Refining Company is New Zealand’s only oil refinery, supplying oil products to all four main oil companies. The NZRC is listed on the New Zealand Stock Exchange and is owned by the four main oil companies and institutional and private investors. The NZRC was founded in 1961 and the Marsden Point Oil Refinery commenced operation in 1964, with a major expansion being carried out in 1986.

What is HRL?

HRL Limited is an Australian energy, technology and project development company. The HRL group of companies employs more than 600 people in its operations throughout Australia. HRL owns and operates a number of energy plants, including a 170MW power station and several ‘Steam over the Fence’ facilities. These operations and new project developments are underpinned by high level technical service capabilities, particularly relevant to power generation and other industries. In addition to cogeneration projects for energy-intensive sites, HRL is also pursuing the commercial application of its advanced gasification technology for power generation with low CO2 emissions from high moisture coal.

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