Ann: GENERAL: NZR: Smart Engineering Behind Boost for Refinery

• Release Date: 30/07/14 10:44
• Summary: GENERAL: NZR: Smart Engineering Behind Boost for Refinery
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					NZR
30/07/2014 10:44
GENERAL

REL: 1044 HRS The New Zealand Refining Company Limited

GENERAL: NZR: Smart Engineering Behind Boost for Refinery

An initiative to reprocess a waste stream normally blended to low value
bunker fuels, into high value diesel and jet fuel is lifting product yields
and margins at New Zealand's only refinery.

Earlier this month engineers installed a pipeline (the "MVC bleed line") to
route the waste stream containing heavy aromatic compounds (that "poison"
catalyst and reduce yields) from the hydrocracker to an existing feed
preparation unit in the refinery. This strips the waste stream off those
compounds in order to feed it back to the hydrocracker for reprocessing, and
extract more diesel and jet fuel.

The MVC bleed line initiative was expected to lift diesel and jet fuel yields
on the hydrocracker and improve Refining NZ's Gross Refiners Margin (GRM) by
USD 0.13 per barrel. Results to date show that the conversion rate on the
hydrocracker - which drives product yields - has lifted from 96% to 98%,
while the refiner has hit its margin target less than four weeks after
installation.

Chief Executive Officer, Sjoerd Post described the initiative as an example
of smart engineering by the Northland based refiner: "The neat part of this
initiative is that we're "piggy-backing" on an existing piece of kit to lift
the yield on the hydrocracker and boost margins," he said.

"The real "a-ha" moment for our engineers was the realisation that a feed
preparation unit used elsewhere in the refinery to strip the feed off the
heavy aromatic compounds, could also be used to re-process the waste stream
of the hydrocracker. It's this stripping process that allows for the
reprocessing of the cleaned up waste stream by the hydrocracker to extract
more diesel and jet fuel."

Post added that by the Company's own reckoning, Refining NZ had been
foregoing value on around 100 tonnes a day of hydrocracker feed: "But with
some innovative thinking from our talented engineers we've taken a waste
stream that would otherwise be sent to bunker fuel, and turned it into diesel
and jet fuel - which is consistent with our strategy to extract more from
each barrel of crude to make higher value fuel products," he said.

ENDS

Notes to editors:

- The installation of the MVC bleed line, other hydrocracker improvements and
the increased use of natural gas are expected to contribute a structural
uplift in the Company's Gross Refining Margin (GRM) of USD 0.66 per barrel.
This uplift comprises: mild vacuum distillation column (MVC) revamp (USD
0.13/barrel); additional natural gas (USD 0.11/barrel); MVC bleed line to BDU
(USD 0.13/barrel); hydrocracker catalyst replacement (USD 0.29/barrel);

- The expected GRM uplift for these initiatives is based on margin and price
assumptions at the time the business case for each initiative was approved by
the Company. The actual GRM achieved for each initiative is dependent on
future margins and prices and may vary to that set out in the initiative
business case.

For further information:
Greg McNeill, Communications & External Affairs Manager
T: (09) 4325115; M: 021 873623; E: [email protected]
End CA:00253266 For:NZR    Type:GENERAL    Time:2014-07-30 10:44:47