Government considers helping refurbish Channel Infrastructure’s empty Marsden Point fuel storage tanks
The Government is looking at potentially helping Channel Infrastructure increase its fuel storage capacity at Marsden Point.
Channel – New Zealand’s largest fuel import terminal business – has identified some “very preliminary options” for significantly increasing its diesel storage capacity more quickly than would normally be the case (about 12-18 months).
It has put these options to the Government, but hasn’t explicitly asked for funding.
Channel has almost 300 million litres of fuel storage currently in use, and an additional 350 million litres of tank capacity that could be “converted and brought into service”.
To put these numbers in context, about 24 million litres of fuel are consumed in New Zealand daily.
Speaking to the Herald, Resources Minister Shane Jones said, “I can tell you very lucidly, Channel Infrastructure have a proposal. It is with our officials. It would require the Crown to work and try to recommission some tanks at Marsden Pt. No decisions have been made.
“I genuinely believe we need more storage in New Zealand, but I can’t make a decision as to what role the Crown should play until the Finance Minister and the Cabinet agree.”
Officials at the Ministry of Business, Innovation and Employment (MBIE), including those who work for its regional economic development and investment unit, Kānoa, are preparing advice on the matter for Jones and Finance Minister Nicola Willis.
Willis said MBIE was looking at regulatory hurdles impeding the operationalisation of tanks, what construction would be required, how long that would take – whether it would be months or longer – and what the funding situation was.
Willis was hesitant to suggest the Government was prepared to pay to help refurbish the tanks.
She noted Channel was a “commercial company” and “you would expect fuel importers would need to pay for their storage”.
Jones said he had also spoken to the Port Taranaki chief executive about potential fuel storage capacity that could become available in that part of the country.
He said loosening regulations around bunds – containment walls or embankments used to prevent tanks from leaking – could be a solution.
“But it depends on when the Methanex tanks may be available, and I don’t want to say or do anything that expedites the departure of Methanex,” Jones said.
Jenée Tibshraeny is the Herald’s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.
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