NZR
04/07/2014 10:02
GENERAL
REL: 1002 HRS The New Zealand Refining Company Limited
GENERAL: NZR: Refining NZ reports record natural gas use in May/June
Record gas use signals boost for Refinery
A record-breaking consumption of natural gas at the Marsden Point refinery is
driving product yields and lifting refining margins.
Figures compiled by Refining NZ show that in the last two months the
Northland based refiner used 570 TeraJoules (TJ) of natural gas (over 12,000
tonnes), an increase of 10 percent over the corresponding period a year ago
and the highest ever use of gas in any two month operating period.
Refining NZ had forecast that an increased use of natural gas across the year
would improve its Gross Refiners Margin (GRM) by USD 0.11 per barrel. The
increased use in the May/ June period is worth an additional USD 0.12 per
barrel to the refiner.
Chief Executive Officer, Sjoerd Post described the gas "statistics" as
another step forward in a series of initiatives expected to add USD 0.66 per
barrel to Refining NZ's Gross Refining Margin.
"We are yet to project the impact of this increased usage across the
remainder of the year, but the strength of the May/June figures indicate that
we are well on the way to achieving the forecast uplift in our margin of USD
0.11 per barrel.
"We've been pushing hard to increase our supply of natural gas, which is
critical to the mix of fuels we use in the refining process. With a better
supply of cheaper, cleaner natural gas we can free-up fuels from processing
to be sold as product - part of our strategy to lift revenue by producing
more of the high value fuel products - and at the same time improve our CO2
profile."
Post said there is a seasonal element to the increase, with supply improved
by the fall-off in dairy processing over winter, but added that the increase
also pointed to changing fundamentals in the gas market.
"Refining NZ has been working with its gas suppliers, other major gas users
and the sector to improve access and allocation of natural gas on the
northern pipeline."
"In addition, we understand that re-negotiation of power-station gas supply
contracts has improved available capacity on the pipeline.
"This is extremely encouraging for the refinery because it adds impetus to
our efforts to optimise production and "opens the door" to further
discussions with industry around what other steps might be taken to boost our
supply of natural gas", he said.
ENDS
Notes to editors:
Refining NZ's natural gas consumption for May/June 2014 was 570 TJ compared
with gas consumption for the same period in 2013 of 520 TJ. This equates to
an extra 50,000 GigaJoules, or 1000 tonnes of natural gas over the two month
period.
The increased use of natural gas, combined with improvements to the
hydrocracking process, are expected to contribute a structural uplift in the
Company's Gross Refining Margin (GRM) of USD 0.66 per barrel. This uplift
comprises: additional natural gas (USD 0.11/barrel); mild vacuum distillation
column revamp (USD 0.13/barrel); hydrocracker catalyst replacement (USD
0.29/barrel); MVC bleed to BDU (USD 0.13/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:00252443 For:NZR Type:GENERAL Time:2014-07-04 10:02:27
