Throughput and Margin Report for September/October 2018

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
16 November 2018
Announcement to NZX
Refining NZ Throughput and Margin Report for September/October 2018
Processing Fee income for the September/October period was strong at NZD 57.8 million, underpinned by
a Gross Refinery Margin
3)
(GRM) of USD 7.09 per barrel for the period and throughput of 7.64 million
barrels - the second-highest in Refining NZ’s history.
The Singapore Dubai complex margin for the September/October period was USD 2.47 per barrel, 10 cents
lower than the July/August period. Refining NZ’s uplift over the Singapore Dubai complex margin was
healthy at USD 4.62 per barrel in September/October. Refining NZ’s balanced product slate enabled it to
achieve a healthy margin notwithstanding current global pressure on gasoline margins. The average
exchange rate for the September/October period was USD/NZD 0.66. Appendix I shows further
information on throughput, margin and refining income.

Natural Gas supply in the New Zealand market is currently under pressure as a result of unplanned field
outages. Due to Refining NZ’s ability to use multiple fuel sources, this is not expected, at this stage, to
have a material impact on the Company.

The Company is currently undertaking a review, to “Refine its Future”; identifying opportunities to
leverage its strategic advantages and core competencies, to deliver improved shareholder returns over
the medium and longer term.

The emergence of multiple technical pathways to carbon neutral transportation fuels, including electric
vehicles, hydrogen and biofuels could open up new opportunities for Refining NZ. The potential
opportunities, including adjacencies, will be further explored over the coming months. An update on the
insights arising from the review, including details of the longer term strategy, will be provided to the
market in due course.



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
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.
3. 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: 2018
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)7.01
Gros s Refi ni ng Margi nUSD (mi l l i on)52.87.54
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)52.87.54
Interi m Cap adjus tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)37.05.28
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)50.8
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)50.8
Mar/AprThroughputBarrel s (mi l l i on)6.96
Gros s Refi ni ng Margi nUSD (mi l l i on)47.56.82
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)47.56.82
Interi m Cap adjus tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)33.24.77
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)45.8
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)45.8
May/JunThroughputBarrel s (mi l l i on)3.91
Gros s Refi ni ng Margi nUSD (mi l l i on)0.70.18
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)0.70.18
Interi m Cap adjus tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)0.50.13
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)0.7
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)0.7
Jul/AugThroughputBarrel s (mi l l i on)7.62
Gros s Refi ni ng Margi nUSD (mi l l i on)52.26.86
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)52.26.86
Interi m Cap adjus tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)36.64.80
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)54.3
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)54.3
Sep/OctThroughputBarrel s (mi l l i on)7.64
Gros s Refi ni ng Margi nUSD (mi l l i on)54.27.09
Gros s Refi ni ng Margi n (excl udi ng Fl oor/Cap)USD (mi l l i on)54.27.09
Interi m Cap adjus tment NZD (mi l l i on)0.0
Proces s i ng Fee (after Fl oor/Cap)USD (mi l l i on)37.94.97
Proces s i ng Fee (excl udi ng Fl oor/Cap)NZD (mi l l i on)57.8
Proces s i ng Fee (after Fl oor/Cap)NZD (mi l l i on)57.8

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 premium, crude
market premium and operational performance. Product quality premium 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 premium 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 134
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.

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

20142015201620172018
Ja n/Fe bBa rre l s 000's6,7407,0566,8267,1607,011
RNZ USD GRM pe r ba rre l
1)
3.869.917.966.587.54
Si nga pore Duba i Compl e x GRM0.705.404.953.423.37
Upl i ft vs . Si nga pore Duba i Compl e x
3)
3.164.513.013.164.17
NZD Proce s s i ng Fe e (mi l l i on)
2)
22.059.657.045.950.8
Ma r/AprBa rre l s 000's6,1467,4117,4715,1406,958
RNZ USD GRM pe r ba rre l
1)
-2.848.771.849.356.82
Si nga pore Duba i Compl e x GRM1.364.823.183.023.75
Upl i ft vs . Si nga pore Duba i Compl e x
3)
-4.203.95-1.346.333.07
NZD Proce s s i ng Fe e (mi l l i on)
2)
20.762.314.848.145.8
Ma y/JunBa rre l s 000's6,9766,4166,8377,7553,910
RNZ USD GRM pe r ba rre l
1)
3.488.556.267.630.18
Si nga pore Duba i Compl e x GRM0.104.242.132.902.02
Upl i ft vs . Si nga pore Duba i Compl e x
3)
3.384.314.134.73-1.84
NZD Proce s s i ng Fe e (mi l l i on)
2); 5)
21.148.943.358.40.7
Jul /AugBa rre l s 000's6,2987,5196,8337,5117,615
RNZ USD GRM pe r ba rre l
1)
6.757.666.208.876.86
Si nga pore Duba i Compl e x GRM-0.552.521.864.702.57
Upl i ft vs . Si nga pore Duba i Compl e x
3)
7.305.144.344.174.29
NZD Proce s s i ng Fe e (mi l l i on)
2)
21.363.541.363.654.3
Se pt/OctBa rre l s 000's6,3887,2217,2516,8167,639
RNZ USD GRM pe r ba rre l
1)
7.549.477.499.317.09
Si nga pore Duba i Compl e x GRM2.545.123.184.732.47
Upl i ft vs . Si nga pore Duba i Compl e x
3)
5.004.354.314.584.62
NZD Proce s s i ng Fe e (mi l l i on)
2)
21.071.852.562.257.8
Nov/De cBa rre l s 000's7,1277,0177,4477,342
RNZ USD GRM pe r ba rre l
1)
9.9810.829.206.83
Si nga pore Duba i Compl e x GRM4.486.374.193.67
Upl i ft vs . Si nga pore Duba i Compl e x
3)
5.504.455.013.16
NZD Proce s s i ng Fe e (mi l l i on)
2)
62.473.067.650.7
TotalBarrels 000's39,67642,63942,66541,72433,133
USD GRM per barrel
1)
4.969.206.478.026.26
NZD Processing Fee (million)
2)
168.4379.2276.6328.9209.5
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
3) RNZ upl i ft vs . Si nga pore Duba i Compl e x GRM i s i n USD pe r ba rre l