OPERATIONS

FEED begins for NZ refinery expansion

ROYAL Dutch Shell, UOP and WorleyParsons have started the NZ$25 million front-end engineering and...

FEED begins for NZ refinery expansion

Last October the New Zealand Refining Company, which owns and operates the plant, announced plans to spend NZ$25 million investigating the feasibility of embarking on a three-year NZ$500 million expansion.

The company said the proposed expansion would ensure it could keep up with New Zealand's growing demand for quality fuels.

NZRC has now appointed WorleyParsons – together with Shell and US refining specialist UOP – to carry out the FEED study.

“We have kept things relatively low key – we still have to do a lot of work before the final investment decision, which is due late this year or early next,” NZRC chief executive Thomas Zengerly told EnergyReview.net.

As well, NZRC had a 10-strong project team working almost full-time on the expansion project.

A favourable final investment decision (FID) would see the Marsden Point refinery crude oil intake increase by about 20%, which would reduce its dependence on imported residue for hydrocracking and blend stocks for the production of petrol, with commissioning possible in 2009.

The refinery’s throughput is currently up to 100,000 barrels of oil per day.

”The refinery has operated at near capacity and performed spectacularly during the past two years,” Zengerly said.

“We recorded record final results for the 2004 calendar, and financial, year. We always thought we would be able to top the 2004 results and I can now confirm 2005 will be another new record for the company.”

For 2005, NZRC would exceed the after-tax 2004 operating surplus of NZ$97.5 million by around 30%. But NZRC will not release full financial details until late next month.

Key aspects would be to increase crude distillation capacity by modifying an existing crude distillation unit, and constructing new process units to increase refinery output, in particular the production of petrol.

If approved the expansion would be the refinery’s second major project this decade. It will follow the NZ$180 million Future Fuels project which has seen the refinery producing petrol with only 1% benzene, down from 3%, and diesel with only 50 parts per million of sulphur, down from 500ppm, from late last year.

The refinery currently refines over 35 million tonnes of petroleum product each year – supplying about 90% of New Zealand’s diesel needs and about 60% of petrol requirements. The rest is imported, primarily from Australia and to a lesser extent Singapore.

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