ADVOCATE COLUMN 4th WEEK MAY 2012

There can be no doubt that the decision by Refining NZ’s shareholders last month to support investing in Continuous Catalyst Regeneration Platformer will be of a fantastic benefit to Northland. Through improved energy efficiency and reduced fuel losses, Refining NZ will be able to process more crude oil to produce more oil products. Setting aside the anticipated return for investors this project is significant for several reasons. It has provided an opportunity for investment in a project that will strengthen New Zealand Inc’s supply chain. At the same time it will benefit the national economy as the projected increase in production capacity and improved efficiency will result in fewer imports and a large saving over time in foreign currency. Obviously at a regional level this investment will create high quality employment and a chance for Northland companies to improve their capabilities in international technology and engineering. Since its establishment, the refinery has played an important role in Northland’s growth. Not only is it a significant contributor to the regional GDP, it has also supported a wide range of community initiatives to the benefit of all Northlanders. There are many businesses which through their relationship with various refinery projects have been able to grow their capability and reputation to a level that has allowed them to compete on the international stage. This may not have happened if various refinery projects had not taken place. Given the significant role that Refinery NZ does play and will continue to play in New Zealand’s supply chain and that a majority of the nation’s fuel will be processed and distributed from Marsden Point, this development could provide the impetus for yet another component required in changing Northland’s economy. Is it prudent to rely on a single mode of delivery –the current pipeline- of this fuel from Northland to New Zealand’s largest economic centre or should more thought be given to securing an alternative line of supply in the form of upgrading the North Auckland rail line? This in turn could act as a further catalyst for other infrastructure development such as increasing the capacity and capability of North Port or other commercial growth such as the relocation of manufacturing from around the upper North Island to Ruakaka’s industrial land. Quite apart from the obvious and direct economic benefit that the CCR expansion will have, it will be interesting to see what indirect benefits will also occur for Northland.