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UPDATE: Gas outage to cost Fonterra $20M a day in spilt milk

UPDATE: Gas outage to cost Fonterra $20mln a day in spilt milk

By Pattrick Smellie

Oct. 25 (BusinessDesk) – Fonterra is expecting to waste about $20 million of milk a day after being forced to close 15 of its 17 processing sites in the upper North Island following a break in the Maui gas pipeline north of New Plymouth.

The gas emergency has gas resellers scrambling to alert all commercial industrial customers, including hospitals, schools and essential services to curtail gas use immediately from the King County northwards, and including the Bay of Plenty.

The gas pipe breakdown couldn’t come at a worse time for Fonterra farmers, who are at the height of a record “spring flush”, as the new milking season is known in the industry.

A Fonterra spokesman said the dairy cooperative was collecting about 35 million litres of milk daily in the affected areas, and only had capacity to process around five million litres at its Waitoa and Te Awamutu plants, which are able to run on coal for milk processing.

Another 15 sites, including the giant Lichfield plant, were closed in the course of the day.

While other North Island plant could theoretically take some of the overflow, all were currently operating at peak capacity, so farmers were being contacted about dumping raw milk on their own land in the absence of processing facilities.

TVNZ reports that Vector, in charge of repairing the Maui pipeline, has said it will be unable to begin excavation at the sight of the serious leak before tomorrow.

While householders are being urged to limit their gas use, they are not yet subject to the gas curtailment order that has gone out to all other commercial, industrial and public service gas users, from restaurants through to glass manufacturers.


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