WHANGAREI REFINERY—I MODERN COMPACT PLANT ECONOMICAL TO OPERATE

Press, Volume CIII, Issue 30453, 29 May 1964, Page 10

WHANGAREI REFINERY—I MODERN COMPACT PLANT ECONOMICAL TO OPERATE

(By

R. H. LAUNDER'

Through the ages, the natural statuary grouped on top of towering Manaia Rock has seen the passing pageant in Whangarei Harbour below. In the coming week-end the statues, which so richly adorn Maori legend, will be silent observers of a ceremony establishing in New Zealand an industry that, more than any other, symbolises the modern age.

The Whangarei refinery of the New Zealand Refining Company, Ltd., is not New Zealand’s first oil refinery. It would be churlish to forget the useful service a small refinery at New Plymouth has rendered for nearly 30 years, during which it has treated by elementary refining processes a good proportion of the nearly seven million gallons of locally-produced oil which is New Zealand’s total production to date. And more than 50 years ago a refinery that was the last word by contemporary standards was imported from Scotland to treat the oil private entrepreneurs thought they had in wells at New Plymouth. Unfortunately for themselves and for New Zealand's economy, they were too optimistic. The installation did not operate; and during World War I it was dismantled and shipped to the Persian Gulf. But though not the first, the Whangarei refinery is incomparably greater than its humble predecessors; and it ranks as a substantial and efficient refinery by the exacting standards of the world’s international oil industry. Initial Capacity The refinery will have an nitial capacity of 52,000 barrels (1,820,000 gallons) daily. About 2.5 million tons (550 million gallons) per annum of crude oil and feedstocks

will be supplied to it from, at present, overseas sources. The annual production will be: Tons Motor Gasolines .. 1,150,000 Diesel Oils Fuel Oils 520,000 Bitumen 120,000 While the refinery presents the customary array of tanks lined up in military order and towers and pipelines in seeming confusion, the visitor to Whangarei who has seen refineries of comparable capacity is struck not by the size but by the compactness of what is before him. This, the refinery technologists explain, is the notable visible feature of the Whangarei refinery's revolutionary lay-out. Benefiting from the continuous research, experiment, and practical application of new ideas by the international oil companies, the Whangarei refinery incorporates concepts and practices which have kept construction costs astonishingly low, and which will similarly affect running costs. Not many years ago, a refinery designed for this capacity would have cost about £5O million; new techniques and engineering designs have reduced construction costs to an estimated £lO million or less.

A refinery of the old type would have used 125.000 tons of steel in its construction; at Whangarei no more than 25,000 tons have been used. A refinery of this size under the old system would employ 700 to 800 men; even five years ago it was estimated that a New Zealand refinery would employ between 300 and 400. New organisation, structural changes, and a tremendous amount of automatic control, have enabled the operating staff at Whangarei to be kept down to 190. Control Room The saving in operating costs that automation has brought is graphically illustrated in the control room. Seated at a console carrying dozens of labelled switches, dials, gauges, and charts with moving fingers running over them, one man will be able to control the operations of the refinery. A flick of a switch immediately brings to him a report on a critical process. The stock in any tank, to several points of decimals, is returned in less than a second after dialling on what appears to be an ordinary telephone. To the average visitor, the designer’s description of the Whangarei installation as an “ austerity ’’ model will seem a misnomer. Rather will he see it as an economic unit—the latest product of the refinery operators’ continuing process of improvement.

the announcement that New Zealand was to have a modern oil refinery was made by the then Prime Minister, Mr Nash, on May 20, 1959. A long search for a suitable site eventually ended at Marsden Point in Whangarei Harbour. Contracts and subcontracts were let in New Zealand and overseas; and men and materials began to move to Whangarei from many parts of the world. All the civil engineering material, furnishings, paint, some process vessels and prefabricated work buildings were New Zealand-made. Steel columns, pressure vessels, and tank plate were bought in Japan, most of the pumps in Australia, pipes, valves, fittings, electrical equipment, and a complete water-treating plant in England. A large amount of specialised equipment, control valves, pumps, and compressors were ordered in the United States and Canada. Holland, West Germany, Belgium, and Italy each contributed special manufactures. The efficiently-organised flow of all this material from diverse and distant sources substantially assisted the completion of construction in 20 months from the turning of the first sod. New Zealand Staff Finding and training a permanent staff for the refinery were pursued with comparable thoroughness and efficiency. From the first it was intended that the refinery should be staffed as soon as possible entirely by New Zealanders. At present, some 30 overseas laboratory specialists are at the refinery; and this includes a “start-up” team which will leave immediately the refinery is working. After the first year, the overseas staff are expected to number no more than 16. Having recruited suitable personnel (including a representative proportion of Maoris), the refinery authorities began to train them for the new profession opened up to them. Classes were conducted; some men were sent to Australia and Europe for training; some worked at the side of over-

seas personnel from whom they would be taking over. All the work at the jetty—tying up ships and connecting hoses, etc.—will be done by a separate company formed of men who originally worked on the construction of the wharves. This work is expected soon to involve handling a tanker a day.

The Whangarei refinery has been constructed to process a wide variety of crude oils, which will meet about 90 per cent of the special requirements of the New Zealand market. It will not produce aviation gasoline, solvents for dry cleaning, lubricants, kerosene, or aviation turbine fuel; nor will it cater for the specialised refining that produces plastics. Only a big through-put makes such products economic; and the comparatively small demand in New Zealand makes it cheaper to continue to import them. Demand For Gasoline The special requirements of New Zealand’s market have no exact counterpart in the world. Motor gasolines account for well over half the country’s oil needs—a proportion exceeding even that in the United States—and there is no crude oil in the world from which anything approaching 50 per cent of motor gasoline can be extracted. The following average consumption figures for 1959 illustrate the problem the New Zealand market presents to the refiners: •World N.Z. % 7. Motor and Aviation Gasoline 22 51 Kerosene and Diesel Oils .. 31 21 Fuel Oils and Bitumen .47 25 ‘Excluding U.S. Without a method of correction, importing crude oil and extracting from it New Zealand’s petrol requirements would result in a huge surplus production of fuel oil. The method of correction originally proposed was to “enrich” the crude oil with gasoline before its shipment to New Zealand. For the modern “in-line” refining process to be used at Whangarei it is preferable to import naptha (a low-grade gasoline) as a separate commodity and blend it in during the continuous refining process. Even so, there is likely to be more fuel oil than the New Zealand market can take. This will be bought by the overseas oil companies and exported, though probably at some inconvenience and expense to them. The demand for automotive diesel oils in New Zealand has risen so sharply in the last few years that the refinery should have no trouble in disposing of its middle distillates. Kapuui Condensate The refining pattern could, of course, be changed in response to changing market demand or supply circumstances. One important consideration is the possibility of introducing to the refinery as a feed-stock condensate produced from the Kapuni wells. However, the use of Kapuni condensate is not yet being considered. Before the condensate can become available, arrangements must be made to sell Kapuni's gas: only by selling both gas and condensate will Kapuni production be viable. (A second article dealing with other aspects of the Whangarei refinery will appear tomorrow.)