Refining to get interest back

Press, 28 May 1983, Page 20

Refining to get interest back

New Zealand Refining, Ltd, will fully recover from the oil companies interest charges on its two SUSI2SO million Eurodollar loans drawdowns, the chairman, Mr R. A. Broughton, told the annual meeting in Whangarei. The loans will almost entirely fund the expansion of the Marsden Point refinery. He said the loan moneys available were adequate provided no major delays occurred in the completion of the project. Mr Broughton said the engineering and design work for the project, which had been carried out in New Zealand, Japan, and the Netherlands, was 90 per cent complete. Procurement of materials, plant and equipment was also substantially complete. About a third of the material had already arrived at Marsden Point, and most of the balance would arrive over the next six months. The infrastructure for the project was largely complete and included onsite and office facilities for the workforce of a standard well above anything previ-

ously seen in New Zealand. Among the facilities were three complete residential villages and training facilities to give some 1200 New Zealanders new skills. Mr Broughton said that there were two main reasons for the refinery’s increased operating profit after tax in the year ended December 31, 1982, of $10,805,000. Production levels of petrol and diesel products, as a proportion of crude oil intake, had increased because of improved technical control of the refining process, and this was expected to continue. The Government-approved processing fee included a profit return on shareholders’ funds, and this element of the fee had increased in line with increases in shareholder funds resulting from retained earnings. The sale of platinum in used catalyst, which occurred every four or five years, had also given rise to a capital profit of $2,140,000. The platinum market price was very high at the time of sale, Mr Broughton said. Agreement has been reached with the Government on a fee for the

company’s management of the refinery-to-Auckland pipeline. He said the rural section from the refinery to Henderson had been completely laid, with testing underway. The urban sector from Henderson to the Wiri terminal was two-thirds complete and was expected to be finished in three months. Final planning for the Wiri terminal was almost complete. The terminal was expected to be finished by December, 1984. The line will carry about 27 per cent of the refinery’s output.