Motunui may lose $300M

Press, 4 June 1988, Page 5

Motunui may lose $300M

PA Wellington The Government’s loss on the MotunuL. Synfuel Plant in the last financial year is expected to be about $3OO million, continuing the drain on the public purse. Mr Dave Marriott, general manager of the Ministry of Energy’s gas and geothermal trading division, said last evening the synthetic petrol plant net loss to the Government was expected to be “of the same order” as the

$294 million loss in the 1986-87 financial year. Mr Marriott said that Synfuel was a tolling operation which charged the Government almost $9OO a tonne to produce synthetic petrol being sold for $3OO.

He was commenting on the Synfuel report issued yesterday which showed Synfuel’s profit falling by 20 per cent to $lO9 million for the year to December 31, 1987. Profit in 1986, the first full year of operation, was $137 million.

The drop in profit was largely because of a 60,000-tonne loss of production when damage to catalyst tubes in one of the methanol reformers of the plant put it out of action for 2>/ 2 months. Dividend dropped by 63 per cent to $47 million last year. Mobil, a 25 per cent shareholder in the plant, had its dividend sliced to $12.4 million from $33 million in 1986. Mobil is ensured a 16 per cent return on investment, providing its technology does not fail. But the Government’s share of the dividend is devoted to offsetting the losses on petrol sales from the expensive plant. Mr Marriott said the Government was quite neutral about the lower result.