The Sunday-Star Times newspaper reports NZRC chief executive Thomas Zengerly as saying refinery management hoped to get board approval later this year for a proposal to increase refining capacity by up to 20%.

Any approval could see the refinery, just south of Whangarei, processing an additional four million tonnes of crude per year from 2008.

Zengerly said strong global demand for crude, particularly from China and India, coupled with a worldwide lack of new refining capacity, had opened up expansion opportunities for NZRC.

Zengerly added that likely company profits looked good for the next few years.

Last year, NZRC reported a record profit of NZ$97.5 million and the industry expects the exceptional operating margins reported by NZRC since January last year to continue.

Last week, the price of crude oil hit a new record of $US62 per barrel on the back of tropical storm threats for US Gulf of Mexico production and the continued strong demand and stretched refining capacity.

NZSX-listed NZRC is majority owned by the big four New Zealand retail oil companies – Shell, BP, Mobil, and Caltex. Its traded shares have rocketed in recent years, from below $NZ20 to the present $NZ46 per share, making them one of the most expensive on the New Zealand bourse and doubling the company’s market capitalisation to over $NZ1 billion.

If approved, a refinery expansion would be the second major project for NZRC after it completes its $NZ180 million Future Fuels project, allowing the refinery to produce low level-sulphur diesel and low level-benzene petrol from late this year.