Share issue planned by Petrochemical

Press, 11 July 1979, Page 20

Share issue planned by Petrochemical

PA Wellington Private investors and institutions seem likely to be given the chance, within the next two years, to buy shares in the S6OM fertiliser works being set up to use Maui gas. The new works will produce between S6M and S7M worth of oil condensate a year, as a by-product of the gas.

Yesterday it was reported that the state-owned Petroleum Corporation of New Zealand, Ltd, will set up a .subsidiary to assume ownership of the planned am-monia-urea project at Kapnni.

new company, Petrochemical Corporation New Zealand, Ltd, has an authorised .share capital of S3OM. The . Petrocorp chairman (Mr F. Orr) said that it was his company’s policy to seek equity participation in Petrochemical Corporation by commercial interests, and the general public, at the appropriate time. “We will see what interest there is before deciding the actual shareholding to be made available,” said the general manager of Petrocorp (Mr R. J. Hogg). In the meantime Petrocorp will use borrowed funds. In addition to the S6OM cost of establishing the works, additional funds will

be needed for working-capi-tal, spares, and to pay interest charges during construction of the complex. The plant comprises two works; one produces ammonia from natural gas, and the other turns the ammonia into urea.

The works will use about two per cent of the Maui gasfields’s output. Mr Hogg said that the plant could be in operation by 1981, providing current objections, over the siting of the works under the Town and Country Planning Act, were disposed of. “We are satisfied that we can get an economic return from the plant, as well as making a substantial saving in overseas funds by provid-

ing a locally made fertiliser, and through the savings in liquid oil condensate.” Mr Hogg said. The works will produce considerable amounts of fertiliser for export, as it is currently estimated that its output will exceed local demand.

Profitability estimates were good. However, much depended on the value of the product at the time of production, and the time it took for New Zealand demand to increase after the commissioning of the plant. Petrocorp was budgeting on gross turnover figures for the works of SISM within four years of the plant being commissioned.