Ameer Randolph
New Zealand's fuel industry has five main components: production and refining, importing, and distribution with retailing. In 2018, the country produced 60 petajoules of crude oil and imported 380 petajoules of petroleum products (most of it crude), with a net self-sufficiency in oil of 12% in 2022. New Zealand's only oil refinery, Refining NZ, is located in Marsden Point, Northland, and supplies up to 70% of the national fuel demand. The rest is imported from refineries in Asia, the Middle East, and the Pacific, with the major oil companies BP, Mobil, and Z Energy importing finished products into all major ports. Diesel and petrol are the dominant fuels in New Zealand, with diesel used for commercial land transport and petrol for private use. The country also has a significant natural gas industry, with 2,600 kilometres of high-pressure natural gas transmission pipelines in the North Island.
| Characteristics | Values |
|---|---|
| Net self-sufficiency in oil | 12% |
| Amount of crude oil produced in 2018 | 60 petajoules |
| Amount of petroleum products imported in 2018 | 380 petajoules |
| Amount of petroleum products consumed in 2018 | 283 petajoules |
| Percentage of natural gas produced in New Zealand carried by the Maui pipeline | 78% |
| Length of natural gas transmission pipelines in the North Island | 2,600 kilometres |
| Percentage of fuel products sold by large players in the market | Up to 80% |
| Amount of crude oil used every year | 46 million barrels |
| Amount of natural gas used every year | 4 billion cubic metres |
| Percentage of energy that comes from fossil fuels | 60% |
| Amount of transport fuels handled by Channel Infrastructure annually | 3-3.5 billion litres |
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What You'll Learn
- New Zealand's net self-sufficiency in oil was 12% in 2022
- The Marsden Point refinery was not suited to processing domestically produced crude oil
- Refining NZ is New Zealand's only refiner of oil products
- Natural gas is used domestically, but not exported due to high transportation costs
- New Zealand's five largest oil fields account for over 80% of oil produced in the country
New Zealand's net self-sufficiency in oil was 12% in 2022
New Zealand's net self-sufficiency in oil was just 12% in 2022, meaning the country was highly dependent on oil imports that year. Net self-sufficiency is calculated by dividing a country's oil production by its consumption. In 2018, New Zealand produced 60 petajoules of crude oil, imported 380 petajoules of petroleum products (most of it crude), and consumed 283 petajoules. The Marsden Point refinery, the country's only oil refinery, was not suited to processing the crude oil extracted in New Zealand, so all of it was exported. The majority of imported crude oil came from the Middle East and Asia.
New Zealand's fuel industry has five main components: production, refining, importing, distribution, and retailing. The country's only oil refinery, Refining NZ, is located in Marsden Point, Northland, and is one of the most modern refineries in the world. It processes a wide range of crude oils imported from key offshore markets, producing premium and regular petrol, automotive and marine diesel, aviation kerosene, and other fuel oils for the New Zealand market. Refining NZ supplied up to 70% of the national demand for fuel annually, with the remaining 30% being imported.
In 2022, Refining NZ closed due to falling refining margins and converted to an import terminal. This left New Zealand without a domestic oil refinery, and the country became entirely dependent on imported refined oil products. The closure of the refinery also had an impact on the country's self-sufficiency in oil, which decreased from 70% (when Refining NZ was operating) to just 12% in 2022.
New Zealand has a dozen large and small operators on the fuel retail market, with BP, Mobil, and Z Energy being the largest players, selling up to 80% of the fuel products nationwide. Smaller operators often serve niche customers, such as farmers, and cover remote areas and tourist destinations. Some of the smaller operators include Gull, Challenge, GAS, Allied, Waitomo, and Nelson.
While New Zealand has some oil and gas reserves, most of the country's energy still comes from fossil fuels. The country uses around 46 million barrels of crude oil every year, which is more than 1,600 litres of crude oil per person annually. In addition to oil, New Zealand also consumes over 4 billion cubic metres of natural gas annually.
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The Marsden Point refinery was not suited to processing domestically produced crude oil
New Zealand's fuel industry has five main components: production, refining, importing, distribution, and retailing. The Marsden Point Oil Refinery, located in Northland, was New Zealand's only significant oil refinery. It operated from 1964 to 2022, producing 70% of the country's refined oil needs. However, the refinery primarily processed imported crude oil from the Middle East and Asia, rather than domestically produced crude oil.
The crude oil processed by the Marsden Point refinery was a medium-sour blend, while most of the crude oil produced in New Zealand is light-sweet. This discrepancy between the refinery's capabilities and the type of crude oil produced domestically led to the export of New Zealand's crude oil to refineries in Australia. The Marsden Point refinery was not designed to process the light-sweet crude oil extracted in New Zealand, making it unsuitable for supporting the country's domestic crude oil processing.
The closure of the Marsden Point refinery in 2022 raised concerns about energy security and self-sufficiency in New Zealand. Some have advocated for the reopening or reconstruction of the refinery to process domestically produced crude oil. However, critics argue that this would be costly and may not significantly improve energy independence, considering the scale of New Zealand's crude oil production and the potential costs of converting the refinery to run on a domestic feedstock.
While New Zealand has the potential for self-sufficiency in refined products, the country remains a net importer of oil. In 2022, New Zealand's net self-sufficiency in oil was only 12%, indicating that the country imported much more crude and refined oil than it exported. The majority of the imported oil comes from refineries in Singapore, South Korea, and Japan.
The closure of the Marsden Point refinery has had broader implications, including a reliance on importing low-quality bitumen and the halt of CO2 collection, which is used in food preservation and beverage carbonation. The New Zealand government regularly commissions reviews of the fuel system to ensure the security of the national fuel supply and maintain awareness of any risks.
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Refining NZ is New Zealand's only refiner of oil products
New Zealand's fuel industry has five main components: production, refining, importing, and distribution with retailing. Refining NZ is New Zealand's only refiner of oil products and is located in Marsden Point, Northland. It is one of the most modern refineries in the world, making New Zealand potentially self-sufficient in all refined products.
Refining NZ is a publicly listed company with around 5,000 private and corporate investors. Major oil companies BP, Mobil, and Z Energy are significant shareholders and are also its largest customers. Crude oil bought by these customers is shipped to the deep-water port at Marsden Point, near Whangarei, for refining into high-quality transport fuels. As a toll refiner, Refining NZ processes a wide range of crude oils imported from key offshore markets, producing premium and regular petrol, automotive and marine diesel, aviation kerosene, and other fuel oils for the New Zealand market.
Refining NZ supplies up to 70% of the national demand for fuel annually. The rest is imported, mainly from refineries in Asia, the Middle East, and the Pacific, via the Singaporean and Korean hubs. When necessary, BP, Mobil, and Z Energy import finished products into all major ports around New Zealand, but mainly to storage terminals at Mt Maunganui, Wellington, and Lyttelton. From time to time, when Auckland's demand is high, these major oil companies may also import finished products through Refining NZ tanks, sending them to Auckland via the Auckland pipeline.
The three main avenues for distributing petroleum from the Marsden Point Refinery to regional centers are by pipeline to the Wiri storage terminal in South Auckland, coastal tanker to storage terminals at New Zealand ports, and road transport. Almost half of the refined fuel products travel via a purpose-built 170 km pipeline to the Wiri terminal in South Auckland for storage and distribution.
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Natural gas is used domestically, but not exported due to high transportation costs
New Zealand's fuel industry has five main components: production, refining, importing, and distribution with retailing. In 2022, New Zealand's net self-sufficiency in oil was just 12%, meaning that the country imported much more crude and refined oil than it exported.
Natural gas is an important fuel for power generation and is used domestically in New Zealand for electricity generation, heating, and cooking. It is also used in the production of key chemicals used to manufacture fertilizers and plastics. However, New Zealand does not export natural gas due to high transportation costs. Natural gas is difficult to transport by ship, and as most of it is transported via fixed pipelines to customers, exporting it would create energy security risks. New Zealand has 2,600 kilometres of high-pressure natural gas transmission pipelines in the North Island, but there is no natural gas transmission in the South Island. The largest user of natural gas in New Zealand is Methanex, which uses natural gas to produce methanol. Industrial use of natural gas accounts for approximately 60% of all use in New Zealand, while 30% is used in electricity generation, cogeneration, and other transformation activities. The remaining 10% of gas use covers household use as well as use in schools, hospitals, and other non-industrial settings.
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New Zealand's five largest oil fields account for over 80% of oil produced in the country
New Zealand's five largest oil fields account for over 80% of the oil produced in the country. These fields are Pohokura, Maari, Kupe, Maui, and Mangahewa. Oil is extracted from several fields in the Taranaki region and exported. The Maari, Pohokura, and Maui fields make up over half of domestic oil production.
The Maui field, discovered in 1969 and brought into production in 1978, formerly provided the majority of domestic oil production. However, production from this field has declined in recent years. The Pohokura field, discovered in 2000 off the north Taranaki coast, is the largest and will be New Zealand's second offshore oil and gas field to be developed. The first commercial production from the Pohokura platform was in 2006. The offshore Kupe field started producing in 2009.
New Zealand's only oil refinery was located at Marsden Point, near Whangārei. It was designed to supply the majority of New Zealand's demand. However, the Marsden Point refinery was not suited to process the country's crude oil, so all crude oil extracted in New Zealand was exported. In 2022, the refinery closed and converted to an import terminal.
New Zealand imports most of its oil and is vulnerable to increases in international oil prices. The country consumed 35-40 million barrels of oil per year, with diesel and petrol dominating petroleum product consumption. The major consumers of oil products are domestic transport, industrial users, and agricultural users.
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Frequently asked questions
New Zealand produces 43,907 barrels of oil per day, ranking 66th in the world. In 2018, 60 petajoules of crude oil were produced in the country.
New Zealand consumes 46 million barrels of crude oil annually, which equates to over 1,600 litres per person.
New Zealand imports 46% of its oil consumption, which was 76,740 barrels per day in 2016. Most of the imported oil comes from refineries in Singapore, South Korea, and Japan.
New Zealand exports a significant amount of its oil outputs, with its oil fields exporting directly to international markets, particularly refineries in Australia and Singapore.
New Zealand produces both crude oil and natural gas. The country also has the potential to be self-sufficient in refined products with its modern refinery, Refining NZ.
