Throughput and Margin Update
NZX Announcement
13 December 2019
Throughput and Margin Update
Refining NZ confirms that while it continues to experience weaker than expected global refining margins
and that refining margin forecasts have a greater than normal level of uncertainty due to the impacts of
the IMO2020 MARPOL marine fuel oil implementation, current global economic tensions, uncertain
Chinese exports and the spike in crude freight rates, processing fee revenue for the financial year ending
31 December 2019 exceeds the Fee Floor.
Refining NZ commented in its September/October Operational Report to the NZX that high sulphur fuel
oil margins versus Dubai crude oil, i.e. “cracks” had fallen as was forecast but the widely-forecast gasoil
crack increase had not yet materialised. It also reported on the crude oil freight spike due largely to the
US imposed sanctions on several Chinese tanker companies.
Leading international energy consulting company FACTS Global Energy reported in November that it
“still expects gasoil cracks to increase as we move into 2020 and that gasoline cracks will track at similar
levels to today.” It said further that “the increase in gasoil cracks is expected to be driven by a significant
increase in marine gasoil demand by year-end (or slightly later) when ships start switching to MARPOL
compliant fuels and MARPOL compliant fuel oil inventory is drawn down as expected.”
Refining NZ is addressing the MARPOL impact in several ways including by broadening its crude oil diet
towards crude oils less impacted by MARPOL. By year-end it will have performed test runs on four new
crude oils and forward crude procurement decisions are already being impacted positively by this.
Refining NZ advises that due to the late crude deliveries in December, coupled with the Company’s
market announcement on 28 November 2019 regarding the financial impact of the Transpower outage,
the Company now expects its annual throughput to be around 42.7 million barrels.
ENDS
For further information please contact:
Greg McNeill
Communications and External Affairs Manager
T: 094325115; M: 021 873623; E: greg.mcneill@refiningnz.com
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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