Refining wants early expansion of refinery

Press, Volume CXI, Issue 32564, 25 March 1971, Page 14

Refining wants early expansion of refinery

(Naw Zealand Press Association) WHANGAREI, March 24. The board of The New Zealand Refining Company, Ltd, was determined that the expansion of the Marsden Point installation should be carried out at the earliest possible date, the chairman (Mr J. B. Leslie) said today.

Mr Leslie told the annual general meeting of shareholders at Marsden Point that he regretted he was unable to make any specific announcement regarding expansion. But the company was working with all interested parties to secure the necessary agreements and conditions for work to commence.

“We believe that it is important that our company should be in a position to supply all of New Zealand’s major refined petroleum products in future years,” said Mr Leslie.

“We are very conscious that by expansion of this re-

finery we can save a substantial amount of foreign exchange which would make an important contribution to the New Zealand economy.” Mr Leslie said, that, at the same time the company must have a clear understanding, with the Government of the processing fee necessary to service the additional investment, and provide a satisfactory return to shareholders. During 1971-72 the bitumen unit would be modified at an estimated capital cost of $350,000 to increase its capacity by 40 per cent. This expansion was necessary to meet the bitumen demand after 1972.

Mr Leslie said that foreign exchange would also be saved if the proposed s7m pipeline was built from Marsden Point to Auckland,

“This would be an attractive proposition from our point of view, giving us a continual flow of product to the major market of Auckland,” he said. Speaking on pollution, Mr Leslie said that the company had always been aware of the need to avoid such a problem, and considerable precautions were taken. Mr Leslie said that the higher profit which would normally accrue from last year’s record intake of crudes and feed stocks had largely been eroded by the rapid escalation in costs which had taken place. The 10 per cent dividend for this year takes $1,200,000 of the $2,268,000 profit.

This leaves just over slm to be retained in the business, together with a nonoperating profit from the sale of platinum. These amounts and the write back of the provision for fees in dispute provided ip the previous accounts enabled a build up of reserves to a total of s7m.

An equal amount has been invested but will be available when required to finance future expansion at the refinery. “Although s7m seems a large sum of money, it is only a small proportion of the total sum which will be required,” said Mr Leslie. “In 1971 there will be a major inspection stop of three weeks in November. This unavoidable loss of processing time will reduce our intake and therefore our gross income. "Overhaul costs will also be substantial and a general escalation in normal operating expenses seems inevitable. ’ “It will be a difficult year but, nevertheless, I am confident that a satisfactory level of profit will again be achieved,” Mr Leslie said.