New Zealand Refining Company, which owns and operates this country sole refinery, has announced plans to build the plant at the refinery, south of Whangarei, if feasibility studies show it to be viable.

NZRC chief executive Thomas Zengerly said local and regional councils were behind the project, which would provide an efficient, independent and more environmentally sustainable source of energy for the refinery and Northland from 2007.

The company will decide by next April whether to proceed with the project, which became a possibility after the government awarded it 1.2 million carbon credits as part of the Projects to Reduce Emissions scheme.

Zengerly said the viability of the project would depend on the availability and price of natural gas and biomass that would be needed as top-ups to the gas produced by refinery operations.

If it goes ahead, the facility will consist of two 42MW gas turbines, producing 690 Gigawatt-hours of electricity per year. The refinery would use 290 GWh of that, exporting 400 GWh to other customers in the region.

NZRC is developing the project in conjunction with Australian energy, technology and project development company HRL, which will build, own and operate the plant.

The plant will use about 5PJ of additional gas a year, as well the gas produced from refining operations; in conjunction with steam from the turbines and from the refinery.