$40m Marsden Pt plant planned

The site of the $40million carbon dioxide plant is shown in the foreground.

A new $40million carbon dioxide (CO2) plant at Marsden Pt will provide jobs and keep Northland's environment cleaner by cutting carbon dioxide emissions from the Marsden Pt oil refinery by more than 50,000 tonnes a year, or six per cent.

Industrial gas and chemical company BOC will build the plant at the refinery and buy the CO2 - a byproduct of the refining process that has been going into the air through the refinery's chimneys - and purify it so it can then be sold for for a variety of industries including food and beverage, dairy, wine, meat, fertiliser production, pulp and paper, and horticulture.

Australian-owned BOC will fund the plant, lease the land from Refining NZ and buy the CO2 from the company with no financial input from Refining NZ.

It will employ about 50 people during construction and is expected to by fully operational by the end of 2015.

It has yet to get resource consent, but that should not be a problem given that the refinery site is zoned for such industrial activities. Refining NZ chief executive officer (CEO) Sjord Post said the deal with BOC was a significant "win-win" for the refinery and New Zealand manufacturers.

"Continuing to improve our environmental performance is a key part of our business strategy.

"This investment gives us the capability to reduce CO2 emissions by more than 50,000 tonnes a year (about six per cent of CO2 emissions), and is a neat fit with our $365million Te Mahi Hou project, which will reduce CO2 emissions by around 120,000 tonnes (14 per cent of emissions) a year," Mr Post said.

"At the same time as reducing our environmental footprint it makes business sense all round to create a revenue stream independent of refining margins and the exchange rate - both of which impact processing fee revenue - while helping to secure an essential feedstock for New Zealand manufacturers for the foreseeable future."

BOC South Pacific managing director Colin Isaac said the state-of-the-art plant would further enhance BOC's efficient and cost-effective delivery of industrial gas to its growing New Zealand customer base.

"BOC has been proudly doing business in New Zealand for over 100 years ... and our new CO2 plant at Refining NZ is yet another strong signal of our confidence in our New Zealand business well into the future," Mr Isaac said.

He said both companies had agreed to a long-term contract exceeding 15 years for the production of purified CO2 from the refinery and the plant would be constructed to the "highest world standards".

Refining NZ's Te Mahi Hou project is due online in late 2015 and is expected to lift processing fee revenue by an estimated $70million per annum, and profit margins by around US$1.10 per barrel.

Carbon dioxide (chemical formula CO2) is a naturally occurring compound composed of two oxygen atoms each double bonded to a single carbon atom.

Burning of carbon-based fuels since the industrial revolution has rapidly increased its concentration in the atmosphere, leading to global warming.