Need for Marsden expansion doubted

Press, 11 September 1979, Page 14

Need for Marsden expansion doubted

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CEDRIC MENTIPLAY

Protagonists of competing energy sources are producing evidence of wastage and overexpenditure if alternative forms are developed. In a report read by Petrocorp and by members of the Government, a London-based expert has stated a fact which has been apparent for some time, that acceptance of one or more methods of producing substitute petrol could make the costly additions already approved for the Marsden Point refinery redundant.

The managing director of the London-based Capita! Plant Internationa) (Mr D. C. Lennon), through whose company the ammonia-urea plant to be built at Kapuni is being supplied, has explained some of the results of the successful production of methanol as an option in liquid fuel development. The Marsden Point plant was built originally with the refinement of Iranian and Persian Gulf crude

petroleum in view. The cost of broadening its scope to enable the refining of other crude oils (such as those available in Indonesia, Malaysia and India) was set originally at $4O million. The present cost, as covered in additions approved for Marsden Point this year, is $350 million.

Mr Lennon has told officials of Petrocorp, and members of Government departments that there would probably be no need for this expansion if the liquid fuels programme went ahead, “I believe the Government may have to reconsider the Marsden Point expansion proposals,” said Mr Lennon. ‘T do not have all the details, but it would seem that with a full programme on liquid fuels New Zealand would not be needing big quantities of imported crude oil.” The prospect of the various forms of fuel being mutually exclusive has been one of the reasons why the Minister of Energy (Mr Birch) has been wait-

ing for all reports to be completed before going to Cabinet with a firm policy. But. in the meantime, time and money may have been saved by the decisions to buy the ammonia-urea plant and to proceed with planning for Marsden Point. Ministerial sources say that the Marsden Point extension has not yet gone beyond the planning stage.

No matter what decision is made, it would still be necessary for New Zealand to import a lot of crude oil, according to departmental sources, so that there was no possibility of Marsden Point becoming redundant suddenly.

Marsden Point’s expansion was approved officially last May. Construction is planned for next year, and for the extended plant to begin working in 1983-84.

The methanol-production plant being offered by Mr Lennon’s company would cost about $lBO million, and would have a daily methanol production of 2500 tonnes.