Refining NZ Throughput and Margin Report for Nov/Dec 2016

Refining NZ
Port Marsden Highway, Ruakaka, Northland 0171, Private Bag 9024, Whangarei 0148, New Zealand
Telephone: +64 9 432 8311 Fax: +64 9 432 8035 Email: corporate@refiningnz.com www.refiningnz.com
18 January 2017
Announcement to NZX
Refining NZ Throughput and Margin Report for November/December 2016
Refining NZ achieved a high Gross Refinery Margin
1)
(GRM) of USD 9.20 per barrel for the
November/December period. With high throughput of 7.5 million barrels, Refining NZ captured
Processing Fee income of NZD 67.6 million for the period.
Both the Singapore Dubai complex margin and Refining NZ’s uplift over that margin tracked above their
respective historical ranges for the November/December period. The Singapore Dubai complex margin
for the period was USD 4.19 per barrel, USD 1.01 per barrel or 32% up on the previous period.
Refining NZ’s uplift over the Singapore Dubai complex margin continued on strongly from the
September/October period with a healthy USD 5.06 per barrel uplift for November/December, the
highest for the year. This was driven by sustained good operational performance.
The average exchange rate for the November/December period was USD/NZD 0.71.
Refining NZ achieved record annual throughput of 42.7 million barrels in 2016 and a historically high
average GRM of USD 6.47 per barrel. This earned Processing Fee income of NZD 276.6 million. The 2016
Fee income is the third highest annual income earned by the company in the last ten years.
Appendix I shows further information on throughput, margin and refining income.
Historical Analysis
A five year history of Throughput, Margins and Processing Fees is attached as Appendix II and can also be
found on the company’s website: www.refiningnz.com







1) Refining NZ’s Gross Refining Margin is defined as the typical market value of the products produced minus the typical
market value of the feedstock used, expressed per barrel of feedstock used. The margin incorporates the cost of the
hydrocarbon used for fuel and incurred as process losses.

Refining NZ
Port Marsden Highway, Ruakaka, Northland 0171, Private Bag 9024, Whangarei 0148, New Zealand
Telephone: +64 9 432 8311 Fax: +64 9 432 8035 Email: corporate@refiningnz.com www.refiningnz.com
Appendix I – Year to date: 2016
Throughput, Margin and Refining Income

Note: The GRM for a period may be above or below the Cap of USD 9.00 per barrel due to previous year price updates, which
are not subject to the Floor/Cap in the current year
Totalper bbl
Jan/FebThroughputBarrel s (mi l l i on)6.83
Gros s Refi ni ng Margi nUSD (mi l l i on)53.77.86
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)54.37.96
Interi m Cap adj us tment NZD (mi l l i on)0.7
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)37.65.50
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)57.7
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)57.0
Mar/AprThroughputBarrel s (mi l l i on)7.47
Gros s Refi ni ng Margi nUSD (mi l l i on)14.41.93
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)13.81.84
Interi m Cap adj us tment NZD (mi l l i on)-0.7
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)10.11.35
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)14.1
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)14.8
May/JunThroughputBarrel s (mi l l i on)6.84
Gros s Refi ni ng Margi nUSD (mi l l i on)42.86.26
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)42.86.26
Interi m Cap adj us tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)30.04.38
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)43.3
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)43.3
Jul/AugThroughputBarrel s (mi l l i on)6.83
Gros s Refi ni ng Margi nUSD (mi l l i on)42.46.20
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)42.46.20
Interi m Cap adj us tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)29.64.34
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)41.3
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)41.3
Sep/OctThroughputBarrel s (mi l l i on)7.25
Gros s Refi ni ng Margi nUSD (mi l l i on)54.37.49
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)54.37.49
Interi m Cap adj us tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)38.05.24
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)52.5
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)52.5
Nov/DecThroughputBarrel s (mi l l i on)7.45
Gros s Refi ni ng Margi nUSD (mi l l i on)68.59.20
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)68.59.20
Interi m Cap adj us tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)47.96.44
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)67.6
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)67.6

Refining NZ
Port Marsden Highway, Ruakaka, Northland 0171, Private Bag 9024, Whangarei 0148, New Zealand
Telephone: +64 9 432 8311 Fax: +64 9 432 8035 Email: corporate@refiningnz.com www.refiningnz.com
Explanatory Note
Throughput
Throughput is the volume of feedstock intake, comprising crude oil, residues, natural gas and blendstock,
measured in barrels. One barrel equates to approximately 159 litres.
Gross Refining Margin
The Gross Refining Margin is calculated in USD as the difference between the value of products and the cost
of feedstock for each refining customer. The value of products use Singapore quoted prices adjusted for
New Zealand quality and the cost of importing those products to New Zealand. Feedstocks are valued using
the notional market values adjusted for the cost of getting the feedstock to the refinery. The Gross Refining
Margin incorporates the cost of hydrocarbon used as fuel and incurred as process losses.
Typically, Refining NZ has an uplift over the Singapore complex margins of around USD 3.00 to 4.00 per
barrel. The value of the uplift varies due to fluctuations in freight rates, product quality premia, crude
market premia and operational performance. Product quality premia are the cost differentials between
products made to New Zealand quality and products made to the quality that applies to quoted prices in
Singapore. Crude market premia are the cost differences between the crude types actually processed at
Refining NZ and Dubai (used as basis for the Singapore complex margins).
Margin Cap/Fee Floor Adjustment
The processing agreements with our customers contain both Floor and Margin Cap clauses, both effective
over a full calendar year.
The Fee Floor is the minimum Processing Fee due, for a calendar year, up to a current maximum of NZD 128
million. If the year-to-date Processing Fee is below the pro-rata Fee Floor, then an interim pro-rata Fee
Floor payment is made by the Customers. Should the Processing Fee exceed the Fee Floor in future months
any pro-rata Fee Floor payments that have been made are repaid to the Customers.
The Margin Cap limits the Gross Refining Margin for each customer to a maximum of USD 9.00 per barrel
over the calendar year. Should the Gross Refining Margin fall below the Cap in future months any pro-rata
Cap reductions that have been made are repaid by the Customers.
The Cap and the Floor are subject to year-to-date adjustments.
Any balance remaining at the end of the year cannot be carried over to the next year.
Gross Refining Margin after Cap/Floor
The Gross Refining Margin adjusted for any impacts of the Cap or Floor.
Processing Fee
The Processing Fee is 70% of the Gross Refining Margin after any adjustment for the Cap or Floor. The
Processing Fee is paid by our customers in NZD.

Notes:
1. The information provided in this announcement relates to refining operations only. Revenue from pipeline or
other activities is not included.
2. The Processing Fee results reported in this announcement are subject to change due to post announcement
price updates and independent audit.

Refining NZ
Port Marsden Highway, Ruakaka, Northland 0171, Private Bag 9024, Whangarei 0148, New Zealand
Telephone: +64 9 432 8311 Fax: +64 9 432 8035 Email: corporate@refiningnz.com www.refiningnz.com
Appendix II - Historical Analysis
Intake/Production, Gross Refining Margin and Processing Fee


20122013201420152016
Ja n/Fe bBa rre l s 000's7,2856,7866,7407,0566,826
USD GRM pe r ba rre l
1)
4.164.183.869.917.96
NZD Proce s s i ng Fe e (mi l l i on)
2)
25.923.722.059.657.0
Ma r/AprBa rre l s 000's6,6357,1516,1467,4117,471
USD GRM pe r ba rre l
1)
3.975.03-2.848.771.84
NZD Proce s s i ng Fe e (mi l l i on)
2)
22.530.020.762.314.8
Ma y/JunBa rre l s 000's6,6027,0486,9766,4166,837
USD GRM pe r ba rre l
1)
4.846.843.488.556.26
NZD Proce s s i ng Fe e (mi l l i on)
2)
28.841.821.148.943.3
Jul /AugBa rre l s 000's7,2967,1946,2987,5196,833
USD GRM pe r ba rre l
1)
6.076.056.757.666.20
NZD Proce s s i ng Fe e (mi l l i on)
2)
38.638.521.363.541.3
Se pt/OctBa rre l s 000's7,4006,7306,3887,2217,251
USD GRM pe r ba rre l
1)
7.562.957.549.477.49
NZD Proce s s i ng Fe e (mi l l i on)
2)
47.816.821.071.852.5
Nov/De cBa rre l s 000's6,8985,6937,1277,0177,447
USD GRM pe r ba rre l
1)
7.881.829.9810.889.20
NZD Proce s s i ng Fe e (mi l l i on)
2)
46.18.862.473.067.6
TotalBarrels 000's42,11640,60239,67642,63942,665
USD GRM per barrel
1)
5.774.584.969.206.47
NZD Processing Fee (million)
2)
209.7159.7168.4379.2276.6
YTD Cap adjustment14.4
NZD Processing Fee (million)
1)
1) Excl ude s Fe e Fl oor/Ca p a djus tme nt
2) I ncl ude s Fe e Fl oor/Ca p a djus tme nt