$365 million Marsden Pt Oil Refinery expansion | Northland News | Local News in Northland

A $365 million Marsden Pt Oil Refinery expansion, that will create at least 300 jobs during construction, is a step closer after getting the backing of the company's board.

Plans by Refining NZ, the owner of the Marsden Pt refinery, for a $365 million expansion and update of petrol-making kit were supported by the company's board of directors yesterday. The next step, a vote of Refining NZ shareholders, will take place at the company's annual meeting on April 27.

The news on the catalytic regenerated platformer (CCR) project came on the same day Refining NZ announced an after-tax profit of $34.5 million for the year ending December 31, 2011, a drop on the $57.7 million profit for the previous year.

CCR is expected to be finished by 2016, with the company saying it would create at least 300 jobs during construction and replace the refinery's 1960s semi-regeneration processing unit with a continuous catalytic regenerated platformer.

It would increase capacity at the refinery by three million barrels of crude a year, or 8 per cent, improve energy efficiency and reduce fuel losses by 15 per cent.

Chief executive Ken Rivers said the board's decision to back CCR was a hugely encouraging step forward for the business.

"We are now working towards final shareholder approval in April. If we do proceed, the expansion will be of long-term benefit to our shareholders and customers and further cement Refining NZ's strategic importance to the New Zealand economy," Mr Rivers said.

"Close to 40 per cent of the country's energy needs are met by oil products from Refining NZ, so we have a strategic role in helping New Zealand meet the challenge of growing energy demand. This expansion will ensure that oil products remain a sustainable part of the country's energy mix.

"At the same time it will go a long way towards our aim to be our customers' supplier of choice by being the most reliable and cost-effective supply source of fossil fuels with the lowest environmental footprint."

He said Refining NZ's history of expansion dated back to 1964. Since then, there have been three major expansions, the most recent being the $190 million Point Forward Project in 2009 which grew the company by about 15 per cent.

Widely used in the global refining sector, the CCR technology will free up constraints in processing units, allowing a far greater volume and a bigger variety of crudes to be processed.

Mr Rivers said the expansion will have a host of benefits for the company's stakeholders and for New Zealand.

Meanwhile, the Northland-based company's chairman, David Jackson, said the 2011 financial result was a sound performance in a challenging business environment, made more difficult by a slump in refiners' margins at the end of the year.

"A return to healthier margins in January 2011 continued for much of the year, falling off at the end of the year as Singapore margins fell on the back of Asia Pacific petrol prices. A pronounced decline of US$5 ($5.9) a barrel was unexpected, and reflects the current sector volatility," Mr Jackson said.

The state of global refining reflected the weakness in global economies.

"Generally there is reduced demand for oil products, particularly in the US and Europe, and while the economic powerhouses of China and India continue to grow, China's growth rate is less than predicted."