'Tremendous achievement': Govt hails rapid delivery of fuel storage tanks

The importance of Northland’s Marsden Point for the future of New Zealand’s energy needs has been marked by the completion of two major fuel storage projects.

The milestones at Channel Infrastructure included the arrival of the first diesel cargo for the Government’s 93 million litre strategic diesel reserve and the completion of Z Energy’s new jet fuel storage.

Prime Minister Christopher Luxon, Finance Minister Nicola Willis and Associate Energy Minister Shane Jones attended the celebration today, with all three noting Channel’s ability to deliver the diesel storage tanks in record time.

Refurbishing fuel tanks of this scale and undertaking the necessary infrastructure upgrades would typically take 18 to 24 months. Channel and its contractors delivered in just three months, including three weeks of planning.

Luxon said it was a “tremendous achievement” and he thanked Channel chief executive Rob Buchanan and his staff for their work.

“Thank you for the way that you are transitioning what was the refinery site into a terminal site that’s future-proofing New Zealand’s energy needs and security,” he said.

Luxon said this year’s fuel shock from the Middle East conflict showed the importance of diesel to New Zealand’s economy, powering freight, farming and emergency services.

“While higher fuel prices were difficult to navigate, having a shortage of fuel would’ve been even tougher.”

The Government funded up to $21.6 million for the diesel storage project because it made New Zealand more resilient, he said.

“It’s really important that we have this facility here in New Zealand. While global tensions rise and fall, New Zealand must be ready ... it’s all about making our country more resilient and more secure.”

Channel Infrastructure chief executive Rob Buchanan (from left) greets Prime Minister Christopher Luxon at Marsden Point, symbolising the way Government and industry have worked together on the project. Photo / Dean Purcell

While somewhat overshadowed by the new diesel storage tanks, Z’s $30 million refurbished jet fuel tank provides an extra 30 million litres of jet fuel storage – enough to fuel 10,000 flights between Auckland and Wellington.

This project was also ahead of time by about six months.

Z chief executive Lindis Jones was also full of praise for Channel, saying it had made “extraordinary progress”.

He acknowledged the partnership between Z, Channel and the Government, saying good relationships had to be formed because of the unprecedented fuel security concerns.

Buchanan said Channel and its partners have spent $165 million on new storage and infrastructure at Marsden Point over the last couple of years, despite the tough economy.

Officials, including PM Christopher Luxon, are dwarfed by the size of the new fuel storage tanks at Channel Infrastructure. Photo / Dean Purcell

Channel was now launching an ambitious Energy Precinct, including a biodiesel plant, transforming the site from a “closed refinery” to a terminal for the future, he said.

“That has the potential to create 20,000 construction jobs here in Northland and bring new opportunities for New Zealand.”

Extra fuel storage like an insurance policy

When fuel was unable to get through the Strait of Hormuz, the Government worked with Channel Infrastructure and Z to improve New Zealand’s diesel storage, as an insurance policy against future disruption.

Channel recommissioned two storage tanks – the largest of which has a diameter big enough to fit The Beehive inside – to take 93 million litres of diesel, providing about nine days’ average use.

PM Christopher Luxon (right) meets with some of the Channel Infrastructure team behind the refurbishment of the storage tanks. Photo / Dean Purcell

After a competitive procurement process, Z Energy was selected to supply and manage the 90 million litre diesel reserve, with the Crown controlling its release to market if needed.

The Government funded up to $21.6 million from its Regional Infrastructure Fund for the project, effectively leasing the storage off Channel Infrastructure for up to 18 months.

What will happen to the storage after this time was yet to be decided.

Willis said it could be used by fuel companies, which will be required to increase their minimum stockholdings of diesel from 21 days’ cover to 28 days by July 2028.

Willis said this timeline could be brought forward as the Government considered how to manage fuel security.

Denise Piper is a news reporter for the Northern Advocate, focusing on health and business. She has more than 20 years in journalism and is passionate about covering stories that make a difference.