Marsden Point could become part of a “special economic zone” (SEZ) aimed at ensuring New Zealand’s fuel and energy resilience as well as attracting overseas investors.
That’s according to Resources, Regional Development and Associate Energy Minister Shane Jones, who says Cabinet will be considering a range of options in the first half of this year.
In late 2021, the board of NZX-listed operator Refining NZ made the decision to turn the site into a fuel import-only terminal under new entity Channel Infrastructure. It followed 60 years as the country’s only oil refinery.
Jones says the decision to rely on petrol, diesel and jet fuel being imported from overseas “carries risk’ for New Zealand as a “small and remote nation”.
“Cabinet will consider a range of options to ensure we are better protected against these risks. Options could include creating energy precincts and special economic zones (SEZs), which are widely used overseas.
“Channel Infrastructure NZ, formerly Refining NZ, is already working to turn the Marsden Point refinery site into an energy precinct. Creating an SEZ there would not only help ensure New Zealand’s fuel and energy resilience, it could provide an attractive option for overseas investors.”
SEZs could include business-friendly regulations, infrastructure and facilities, investment support, and customs and trade facilitation.
The idea would not only apply to energy sites but also to any strategically important areas of the country where infrastructure, ease of doing business and investment are critical to the economic interests of New Zealand, Jones says.
Jones also released a new fuel security study which details the risks of an insecure fuel supply and the negative impacts disruptions could have on Kiwis and the economy.
A separate report also details an investigation into reopening the Marsden Point refinery, which was agreed in coalition negotiations between New Zealand First and the National Party
“The Government will have to carefully weigh up the costs and benefits of the actions suggested in the fuel study.
“These reports show there are going to have to be trade-offs if New Zealand is to have secure fuel supply. The reports will also be incredibly helpful in forming our Fuel Security Plan, being developed this year.
“Channel Infrastructure released its energy precinct concept in October last year which contained a number of exciting options, including a biofuel refinery. If SEZs can help smooth the path for prospective investors and tenants, the Government is willing to consider them, along with other options,” Jones says.
Industry welcomes options
Research undertaken by PwC has found that development of Channel’s Marsden Point Energy Precinct projects could generate GDP of around $3.3 billion, and contribute around 20,000 full-time equivalent jobs, over the 10-15 year construction phase. Once fully operational, the projects could generate around $290 million annually in GDP and contribute around 1150 FTE jobs.
Channel Infrastructure chair James Miller welcomed the potential of a special economic zone for the site.
“All of the potential options noted by the minister as forming part of a potential special economic zone would help us to deliver our vision for Marsden Point as an energy precinct, grow our operations, and create new jobs in Northland and we look forward to the Government announcing more detail about how a new special economic zone might work in due course,” Miller says.
Meanwhile, National Road Carriers Association policy and advocacy general manager James Smith says turning Marsden Point into an energy precinct “makes sense” as there is existing infrastructure to build from.
“New Zealand will be reliant on imported fuels for several decades until users transition to alternatives as they become commercially viable.
“New Zealand is also facing increased supply chain disruptions from geopolitical conflict and natural or physical disasters that impede shipping.
“Increasing the on-shore capacity to withstand disruptions is needed urgently,” Smith says.
