Marsden expansion plans defended

Press, 16 February 1984, Page 14

Marsden expansion plans defended

PA Wellington Expansion of the Marsden Point oil refinery will allow New Zealand to import Chinese crude oil, the refinery board’s chairman, Mr John Milward, has said. The expanded refinery’s hydrocracker unit would be able to process heavy crude oils, said Mr Milward. These heavy oils were becoming cheaper, and were expected among any discoveries off the Chinese coast. “It would be nice, wouldn’t it, if we were able to take some of that crude oil — which I am sure the Chinese are going to discover in their off-shore areas — as part of our developing reciprocal trade with that enormous country,” he said. “We can’t at the moment, but we can when the refinery is expanded.”

Mr Milward has been chairman of the refining company since last October. He is chairman of BP New Zealand. Before that,

he was exploration and production business stream general manager for BP outside the United Kingdom. BP holds big oil exploration licences off China. To date, it has announced one dry well. Mr Milward said the expanded refinery will give New Zealand a little more certainty in increasingly uncertain times. He told a Wellington Rotary club luncheon he did not want to debate the economics of the $1650 million refinery extensions due for completion by early 1986. During the last month energy critics had urged a Government white paper explaining the project, saying it was long past being a sound investment and likely finally to cost $2600 million, but the decision in 1960 to build the refinery was correct and its logic still valid, Mr Milward said.

Transporting crude oil in bulk to near its markets and then refining it, rather than shipping oil products,

avoided problems of segregating tanks on ships, maintaining product quality, and contamination.

Defending the extensions started in 1982 with a $1035 million price tag and early 1985 finish date, he said, “Uncertainty is more than ever a feature of the age in which we live.

“The expanded refinery will enable us, in New Zealand, to contend a little more certainly with a small part of that uncertainty.” Nearly all oil products except lubricant oils could be processed in New Zealand.

The refinery could process the heavy and cheaper crude oils which were being replaced as fuel in power stations by coal and nuclear power, and formed an increasing proportion of new oil discoveries. Mr Milward said the extension project was very large and complicated by world standards. Such projects took a long time from start to finish.