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- Release Date: 27/11/13 12:25
- Summary: MONTHLY: NZR: Business Update-Throughput and Margin Report(Sept-Oct 2013)
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NZR
27/11/2013 10:25
MONTHLY
REL: 1025 HRS The New Zealand Refining Company Limited
MONTHLY: NZR: Business Update-Throughput and Margin Report(Sept-Oct 2013)
The Processing Fee earned for the period September to October 2013 was NZD
16.6 million, generated from a throughput of 6.7 million barrels.
The average Gross Refinery Margin 1) (GRM) for the two month period was USD
2.91 per barrel and the average exchange rate was USD/NZD 0.83.
Singapore complex margins remained negative throughout the two-month period,
and this affected refining margins across the refining industry worldwide.
A planned three-week shutdown, to regenerate the Platformer catalyst and to
perform maintenance on a crude distiller and a desulphurisation unit,
commenced in late October and was completed on time. The shutdown reduced
throughput volume by around 1.5 million barrels, mostly in the
November/December period. The Company remains on track to achieve a
throughput of close to 41 million barrels during 2013.
Appendix I shows further information on throughput, margin and refining
income. The Gross Refining Margin for the year to date is USD 5.03 per
barrel and the exchange rate USD/NZD 0.82. A five year history of
Throughput, Margins and Processing Fees is attached as Appendix II and can
also be found on the company's website: www.refiningnz.com
CCR Project - Te Mahi Hou
Te Mahi Hou is progressing to plan with the achievement of two milestones -
the pour of the concrete foundation for the CCR unit and the delivery of the
main CCR reactor - during the reporting period.
The CCR foundation laid on the 9th of November required around 2750 cubic
metres of concrete. The delivery of 550 truckloads over a 16 hour period
made this one of the largest continuous concrete pours undertaken in New
Zealand. A week later the 52 metre long CCR reactor weighing 172 tonnes was
delivered to Northport from Mumbai, India. This is the first major CCR piece
to be delivered to the refinery.
The $365 million project, due to be commissioned in December 2015, will
increase the Company's processing capability by around 3 million barrels per
year and deliver an estimated uplift in the Gross Refiners Margin of around
USD1.10 per barrel, through improved energy performance and yields. To date,
$165 million has been spent on the project, excluding Front End Engineering
and Design and capitalised interest.
Hydro-cracker Projects
Planning for a month-long maintenance shutdown of the hydro-cracker next
March, is well underway. At that time, several margin enhancing and other
initiatives will be completed. The Company remains on track to deliver in
2014 the estimated USD0.66 per barrel uplift in Gross Refiners Margin through
these initiatives and the estimated $4 million cost savings versus 2012
actual expenditures. Detail of these projects was included in the August
2013 presentation to analysts which can also be found on the company's
web-site. The capital spend through the hydro-cracker shutdown, including
the purchase of fresh hydro-cracking catalyst is around $55 million.
Looking ahead
The scope and timing of the hydrocracker shutdown, coupled with the continued
weakness in Refiners Margins, means that it is likely that the company's
borrowings will "peak" in 2014 at around $80-$120 million higher than
originally estimated at the time of the Te Mahi Hou investment case.
(Current borrowings amount to around $170 million). As a prudent step, the
Board of Directors have resolved to supplement the $300m banking facilities,
that were put in place when Te Mahi Hou was approved, with longer term core
debt of $150 million. The Company is currently in positive discussions with
its bankers to put this longer term core debt into place and a further
announcement will be made when these arrangements are complete.
ENDS
For further information contact:
Greg McNeill
Communications and External Affairs Manager
Refining NZ
T: 09 432 82311
M: 021 873 623
E: [email protected]
End CA:00244356 For:NZR Type:MONTHLY Time:2013-11-27 10:25:24
