Refinery to Auckland fuel pipeline repairs completed

2 MinutesBy NZ Trucking magazineSeptember 26, 2017

Over the weekend repairs to the refinery to Auckland pipeline were completed and operations restored, with the first batch of jet fuel arriving into Wiri just after 10am on Sunday – around two hours ahead of the earliest planned delivery.

“Our thanks go to those agencies who responded to the pipeline leak, to the Government and others for their offers of support, and to our staff and contractors who worked tirelessly to complete the repairs and successfully restore supply into Auckland,” said Refining NZ CEO, Sjoerd Post.

The company confirmed it increased pressure of the Auckland fuel pipeline to 87 bar weeks before it burst, but say there is no evidence the pressure increase caused the leak. Refining NZ is only required to test the condition of the pipe‘s walls by running a scanner through the pipe every 10 years and the last internal scan of the pipeline was carried out in 2014. Inspection frequency may be reviewed in light of the leak, as a spokesperson says a scan would have detected the damage.

Based on the actual repair time Refining NZ has revised down the revenue impact from the initial announcement of $10 to $15 million to $8 to $9 million.

The first estimation of costs associated with the repairs, recovery and remediation are in the $4 to $5 million range, and based on current best estimates, the impact of the incident on the company‘s full year 2017 net profit after tax will be in the range of NZ$ 9 to $11 million.

Refining NZ has insurance cover for business interruption, property and environmental damage among others. However, given the limited extent of the currently expected losses and the excesses that apply to the policies, they only expect to recover a limited amount