Refinery fuels jobs growth in North

Hundreds of jobs are in the pipeline after a deal between the Government and Northland's Marsden Pt oil refinery.

The refinery is paying for a $180 million upgrade and, in the process, avoiding a multimillion-dollar carbon tax.

The New Zealand Refining Company said the work meant it could produce fuel that met tough new environmental standards imposed by the Government.

Refinery general manager Thomas Zingerley said the work was expected to create several hundred jobs during its construction phase.

It would also pour millions of dollars into the Northland economy.

The refinery is the first company in the country to have a Negotiated Greenhouse Agreement (NGA), which gave it an exemption from the $25 carbon tax on businesses for every tonne of carbon emitted.

The tax is aimed at helping meet the targets of the Kyoto Protocol on the environment.

Company chairman Ian Farrant said the NGA was an important factor in allowing the upgrade to go ahead.

It should be completed by the end of 2005, in time for the introduction of the new fuel standards from January 1, 2006.

Mr Zingerley said the announcements were great news for the refinery, Northland and the whole country.

The refinery first needed to remove a large oil tank from the part of the site where the new units would be placed.

Construction would start early next year, he said.

The site supplies more than 80 per cent of New Zealand's refined oil, about 70 per cent of petrol and more than 90 per cent of the country's diesel and jet fuel requirements, Mr Farrant said.

The NGAs provide an exemption to the carbon tax to firms that move towards international "best practice" emission management.

NGAs are limited to businesses or industries who have overseas competitors not subject to less stringent climate change policies.

"The refinery is already in the top 25 per cent of refineries worldwide, in terms of energy efficiency," said Mr Farrant.

"[This] will maintain and improve our standing, through utilising the world's best technology, construction and engineering."

Minister of Energy Pete Hodgson, who also convenes the ministerial group on climate change, said the agreement was an example of the Government and business working together to achieve "a balanced outcome for New Zealand".

"This agreement will help our environment in two ways.

"In moving toward world best-practice emissions management the refinery will reduce greenhouse gas emissions from the refining process.

"By producing higher quality petrol and diesel it will enable New Zealanders to use vehicles with more advanced, cleaner engine technologies."

- NZPA