Argus Media Limited

09/21/2021 | News release | Distributed by Public on 09/20/2021 20:25

Refining NZ's July-August margins weaken

The operator of New Zealand's sole refinery, the 135,000 b/d Marsden Point, reported a fall in refinery margins during July-August compared with May-June and a year earlier because of weaker transport fuel demand with the impact of the Covid-19 pandemic.

Its July-August gross refinery margin (GRM) was $2.96/bl, down from an average of $4.07/bl in May-June and above the negative $4.18/bl for July-August 2020, Refining NZ said, in line with Asia-Pacific margins. Singapore Dubai complex margins for July-August averaged negative $2.54/bl, which was marginally below the average of negative $2.62/bl during May-June. Refining NZ's GRM premium over the Singapore margin was $5.49/bl, driven primarily by lower prices for crudes processed relative to Dubai crude but down from $6.68/bl for May-June.

Refining NZ shareholders have voted in favour of converting Marsdent Point to an oil products import terminal, which is proposed to be operating from mid-2022.

Jet fuel volumes during July-August were 36pc below pre-Covid-19 July-August levels and 40pc below pre-Covid-19 levels for May-June, Refining NZ said. Jet fuel shipments through the refinery's pipeline to Auckland airport totalled 2.4mn bl (38,700 b/d) during July-August period from 33,900 b/d in the same period in 2020 and more or less in line with the average of 39,000 b/d of January-June.

Jet fuel demand was affected with the pause in quarantine-free travel between New Zealand and Australia from late June following an outbreak of the Delta variant of Covid-19. Domestic air travel was also affected following a national lockdown on 17 August. The country's largest city by population Auckland is in full lockdown until 22 September, while the rest of New Zealand emerged from the lockdown in early September.

By Kevin Morrison

Refining NZ operational data (mn bl)
Jul-Aug '21 May-Jun '21 Jul-Aug '20 2021 FY (Jan-Aug) 2020 FY (Jan-Dec)
Brent crude ($/bl) 72.90 70.90 44.10 66.90 41.70
Refining throughput 5.64 5.17 1.77 18.70 29.88
GRM 2.96 4.07 -4.18 3.12 1.63
Unplanned downtime % 0.00 0.00 81.20 0.00 23.20
Source: Refining NZ