Marsden Point refinery vulnerable: Air NZ | Stuff.co.nz

Fire or tsunami damage to New Zealand's only oil refinery could easily?cripple domestic oil supplies with flow-on effects for freight, air?travel and tourism, says Air New Zealand.

The national carrier has made the comments in its submission on the?Ministry of Business, Innovation and Employment's (Mobie) review of the?country's oil security.

The company targets the Marsden Point Refinery near Whangarei as a?weak point in the domestic supply chain because it says its?off-loading wharf, pipelines, storage facilities and refinery are all?closely linked.

This "interdependence" makes the importing capability of the?facility vulnerable to a fire in the refinery, meaning imported jet?fuel supply would be likely to cease during a fire and for a time?while damage was repaired, the airline says.

"Refineries do catch fire ... Fires do happen in well run?refineries," it says in its submission.

Air New Zealand also says Mobie's report has understated the tsunami?risk to Marsden Point and work should be done to better understand the?potential impacts on the refinery and its wharves.

"Just because an event is one in 2500 years doesn't mean it can't?happen tomorrow."

The airline said lessons could be learned from the experience of?refineries along Japan's east coast which were affected by the 2011?tsunami.

In its own submission, Refining NZ says a major disruption to its?Marsden Point Refinery over an extended period could have an economic?impact of up to $400 million with ongoing costs.

The cost of a minor disruption, or one which does not completely stop?supply, could run to $6.5m a day.

However, Refining NZ backed its safety record, saying its annual rate?of unplanned downtime on key processing facilities was 1.3 per cent?for the year to February 2011, and it had recently achieved two million
hours' work without a lost time incident.

It said greater security of supply would result from further?investment in pipelines leading from Marsden Point to Auckland and in?development of the Wiri oil terminal in south Auckland.

But Air New Zealand has also submitted an idea to construct a new fuel?storage depot in west Auckland to supplement the existing Wiri depot,?which it says should be used only for jet fuel.

The Wiri terminal is operated by Wiri Oil Services Ltd (Wosl) - a?collective of the four major oil companies BP, Chevron, Mobil and Z?Energy - and judging by its own submission is planning to expand the
terminal and does not see a need for a separate depot.

Submissions from Wosl and Refining NZ cite the protection of land?around the Wiri terminal as a major concern, saying encroachment of?sub-divisions and other land uses could endanger the future use of
land for fuel storage.

Both companies believe new oil storage facilities, such as that?suggested by Air New Zealand, would be unnecessary and costly.

But Air New Zealand says the industry is not collectively acting "to?develop a coherent medium term strategy and undertake new investments?that have medium term benefits".

The fuel companies were unwilling to combine their fuel storage?facilities at Christchurch Airport despite encouragement from Air New?Zealand, says the airline's submission.

- ? Fairfax NZ News

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Source: http://www.stuff.co.nz/business/industries/8158095/Marsden-Point-refinery-vulnerable-Air-NZ

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