the new zealand refining company - energystream new zealand refining company section 1: our company...
TRANSCRIPT
The New Zealand Refining Company
Section 1: Our Company
Section 2: NZRC Results
Section 3: Global Refining Situation
People and Environment
Where We Are Today At NZRC our aim is to ensure that everyone on site goes Safely Home, Every Day. In 2010, we focused on embedding our vision of Safely Home, Every Day and on reinforcing the accountabilities that translate that vision into clear expectations. We continued to demonstrate our commitment to health and safety and to develop our safety leadership skills. Our emergency systems and people are good and we know what’s needed to become world-class.
Where We Want to Be • Visible management commitment to health and safety is demonstrated in everything we do. • Every individual understands how they contribute to a successful health and safety performance. • We are passionate about health and safety and intervene to protect others. • Every individual is trained to carry out their tasks safely or is adequately supervised. • Our health and safety management and emergency systems are robust and recognised as world-class. • We understand and manage our significant health and safety risks.
Where We Want to Be • Our environmental footprint is significantly reduced beyond that required by law. • The impact on our neighbours from visible process smoke, noise and offensive odours is rare and our air quality is well within strict international environmental guidelines. • Our greenhouse gas emissions intensity and energy efficiency are the best they can be. • All current and legacy waste is well managed and our harbour remains safe to enjoy and to take food from because we ensure anything that leaves our site/operation is under our control. • Our site is clean and tidy and we help our community achieve its environmental aspirations.
Environmental Affairs
Environmental performance:
very good and getting better
compliance and beyond
energy performance/ energy study
good neighbour/ good corporate citizen
Patuharakeke relationship
NZRC’s values are the source and guideposts for the way we work and they are the foundation on which all
our actions are based.
They express an aspiration of the type of organisation we intend to
become and the way we are going to behave as we bring our Business
Plan to life.
Company Overview
NZRC Overview
• Supplies 80% of NZ’s oil product requirements. Oil Companies import
the balance (mainly from Singapore region, Japan and Australia).
• Owns the only oil refinery in New Zealand.
• Toll refiner of crude oil – charges a processing fee based on gross
margin generated.
• Owns the multi-product pipeline to Auckland (Approx. 50% of
production), remainder of market dispersed (coastal 46%, road 5%).
• 75% ownership of Independent Petroleum Laboratories
• 320 employees, 150 – 300 contractors (can move to +500 SD etc).
• NZRC Governance is through the Board of Directors (shareholder
representation from both the oil companies and via independent
appointment), the chairman is independent.
NZRC Overview
We make approximately….
• 50% of NZ’s petrol
• 75% of NZ’s Diesel
• 80% of NZ’s Bitumen for roading
• Fuel Oil for shipping
• Sulphur for farm fertiliser
• Co2 for carbonation of drinks
NZRC Company Structure
Listed on New Zealand Stock Exchange.
280 million shares with current market capitalisation of ~$1.04b.
Shares held by four major oil companies in New Zealand, Garlow Management and ~3,750 other shareholders.
Directors:
BP 2
Mobil 2
Z Energy 2
Chevron 1
Independent 3
NZRC Customers/Shareholders
Refinery Capacity Allocation
Greenstone Energy, 30% BP, 28%
Chevron, 21%Mobil, 21%
The four customers have
access to 100% of the refining
capacity.
Shareholding
BP
24%
Chevron
13%
Mobil
19%
Greenstone
Energy
17%
Garlow
Management Inc
13%
Public
14%
NZRC Leadership Team
Ken Rivers
Chief Executive Officer
Jack Ariel
Project Director
Vaughan Wykes
Engineering
Denise Jensen
Corporate Services
(Company
Secretarial)
Dalila Zaghal
Strategy & Supply
Chain
Anna Meyer
People and
Environment
Peter Gubb
Refining
Sue Dyke
Corporate Services
Manager
NZRC – Brief History
1958 First approach to Government by Oil Companies
1959 NZRC registered on January 9th
1961-64 Site selected and construction for £10 Million (under Bechtel control)
1964 Start-up on April 30th
Late 70s Discussion and planning for expansion, Think Big and utilisation of Maui Gas
1980 US$500Million credit line for project
1982-86 Construction (under Badger Chiyoda control) also RAP construction
1985 Utilities start-up, A Block revamp, RAP commissioned
1988 B Block start-up, C Block initial start-up
1988 Oil Industry deregulation planned by Government from Jan 1 1989
- 88 for 89 campaign – competitiveness drive
1996 Full production consistently, Heads of Agreement (Processing) signed
1996 Processing Agreements signed with Customers
NZRC – Brief History
1999 RAP debottlenecked – IPS1 Start-up
1999 Processing Floor mechanism invoked (low Refining Margins)
2000 Alliance signed with Transfield Worley for Maint and Eng Services
2001 Government Product Specification review, Scouting Study for FF Options
2003 NGA signed with Government
2003 Board Sanction of FF Project, FW selected EPCM contractor
2003 Construction started on Future Fuels Project
2004 RAP debottlenecked – IPS2 Start-up and second pump at IPS1
2005 HSU, HDS3 and BRU started up - on time, on budget, on spec
2006 Board approves FEED for Point Forward Project, Worley Parsons
selected contractor
2007 Board Sanction of PFP Project - $180M Upgrade of CDU
2009 Point Forward Project completed
NZRC – Brief History
2010 Shell sells downstream assets in NZ (incl.. NZRC shares). New cornerstone
shareholder and customer welcomed – Greenstone Energy Ltd – Now Z Energy
2011 NZRC celebrates 50 years since incorporation
Section 3: Strategy
NZRC Strategic Plan
Strategic Corporate Advantages
NZRC has some strategic advantages:
•Ownership, listed company.
•Strong independent mindset.
•Access to best international knowledge.
•Commercial Technical Service Agreement with Shell.
•Only refinery in the country, logistical advantage.
•Reputation for reliable quality supply.
•Bottom line focus.
•Proactive maintenance programmes.
•Major project execution experience.
Strategic Refining Advantages
NZRC has some strategic advantages:
•Located close to the largest and fastest growing transport fuels
market NZ (Auckland).
•Owns and operates the product pipeline to the Auckland market.
•As the only oil refinery in NZ there is a niche position created by
the freight differential between crude and product.
•The NZRC configuration is well suited to the NZ and regional
markets, i.e. strongest in jet and diesel fuels, which will be the
products with the highest potential demand growth.
•Versatile regarding crude diet (designed to run high S crude).
•Deep conversion, high complexity refinery
Section 5: The Market
Demand Outlook – Distillate Products
With PFP commissioning NZRC’s share of total demand increased to ~75%. This
will erode again over time.
NZRC vs NZ - All Distillates (kt per year)
0
2,000
4,000
6,000
8,000
10,000
12,000
1995
2000
2005
2010
2015
2020
2025
30%
40%
50%
60%
70%
80%
90%
NZRC Production NZ Demand Range NZRC Supply vs NZ Demand (% of Ave)
PFP
PFP
Questions The New Zealand Refining Company
Overview
OIL REFINING SERVICE
NZRC is a toll processor
Operations governed by Processing Agreements
Processing Fee is related to regional refining margins (import and quality parity)
Ownership of hydrocarbon stays with the suppliers - Oil Companies
FEEDSTOCK RECEIPT
All feedstock supplied by processors across jetty
OIL PRODUCT DISTRIBUTION (No direct contact with retail market)
Pipeline fee (volume related) is applied for pipeline distribution Via NZRC owned
and operated multiproduct pipeline to Auckland
Via specific pipelines to adjacent truck loading facility owned by oil companies
Via jetty to shipping (Shipping control by others)
From storage tank to trucks (Bitumen & Sulphur)
How it all works
Lisa Parkes
CDU
1&2
Naphtha (Gasoline)
140/180 degC minus
Kerosene (Avtur)
140-250 degC
Gasoil (Diesel)
250-350 degC
HVU2
Vacuum Gasoil
350-370 degC
BDU
HCU
Waxy Distillate 370-540 degC
DAO 540-620 degC
Asphalt (Fuel Oil)
Naphtha
Kerosene
Gasoil
H2
350 degC +
620 degC +
Plus
CO
2 S
Distribution
Distribution
Auckland Mount Maunganui
Napier
Wellington
New Plymouth
Lyttelton
Timaru
Dunedin
Bluff
Nelson
Pipeline (40%)
Coastal
Distribution
(40%)
Imports
(20%)
NZRC c80% of total
market in 2011
RAP
NZRC
NZRC
WOSL
IPS -1
IPS - 2
Marsden Point
Wiri Terminal
Wellsford
Kumeu
250 mm Diameter 170 km Long
Back up slides
Safely Home Every Day
Safely Home, Every day
in late 2007, the NZRC safety data was clearly indicating that some immediate and positive actions were required
we were hurting too many people
we had historically been a safer place to work
some people thought that the site safety performance was acceptable, yet it was far from being world class
despite our interventions, incidents were still happening
NZRC in conjunction with its business partners are on a journey to develop and progress a plan designed to deliver success and to create a place at NZRC where everyone goes safely home, every day.
Safely Home, Every day
Work accidents are avoidable Safety culture key to success Safety record is an indicator of
management quality No differentiation between NZRC employees and
contractors Induction, Training, Safety first, Management focus,
Reporting, Follow-up, Take 5, RCA/Tripod tools, Rules of fair play, PTW system, Housekeeping
Key measure is TRCF=Total recordable case frequency per million hours worked
Significant progress achieved during last years Process Safety is a key overaching focus area and multiple
initiatives are applied across the board
There is no activity at NZRC
that is so urgent or important
that it can not be done safely
Visible Leadership Commitment
our senior managers are visibly committed and our supervisors demonstrate clear health
and safety leadership
how will we get there
increase
visible
presence of
senior
leaders
demonstrate
safety is
important
believable
vision
reinforce
safety
messages
by
engaging
with our
people
get to
know
our
people &
personalise
safety
build
our
safety
leadership
capability
Safely Home, Every day
Accountabilities Every individual is clear on how they contribute to a successful health and safety
performance and we are measuring that
how will we get there
key
accountabilities
for
all levels
build
into
PDPs
cardinal
rules
new
induction.
set clear
expectations
Safely Home, Every day
Behaviour
PATTERNS& TRENDSPATTERNS& TRENDS
What’s Been Happening?
What’s Been Happening?
PATTERNS& TRENDSPATTERNS& TRENDS
What’s Been Happening?
What’s Been Happening?
MENTALMODELSMENTALMODELS
What are the Prevalent Assumptions?
What are the Prevalent Assumptions?
MENTALMODELSMENTALMODELS
What are the Prevalent Assumptions?
What are the Prevalent Assumptions?
EVENTSEVENTSWhat Just Happened?What Just Happened? EVENTSEVENTSWhat Just Happened?What Just Happened?
SYSTEMIC
STRUCTURES
SYSTEMIC
STRUCTURESWhat are the
Forces at Play?
What are the Forces at Play?
SYSTEMIC
STRUCTURES
SYSTEMIC
STRUCTURESWhat are the
Forces at Play?
What are the Forces at Play?
REACT
ANTICIPATE
PREDICT
TRANSFORM
what is it we reward?
what are the questions we ask?
What language do we use? (solution messaging)
it is our leadership behaviour that is changing
We will go beneath our systemic
structures. We will challenge our
assumptions and we will gain insight
into what is driving behaviour
how will we get there
Safely Home, Every day
Safely Home, Every day
Process details
David Gray
CDU1
CDU2
HVU1
BBU
HVU2
BDU
HCU
HMU
HDS2
SplitHDT
PlatDePr
HDS1
Fuel
Gas
GasOil
Blend
Mogas
Blend
FuelOil
Blend
RG
RGH2RG
H2
RG
H2
RG
H2
RG
Natural Gas
Syngas and Reformates
Condensates and Low
Sulphur Crudes
High Sulphur Crudes
Imported Residues
High Sulphur Crudes
Low Sulphur Crudes
Imported Residues
Naphtha
Kero
LGO
HGO
Long Residue
Naphtha
Kero
LGO
HGO
Long Residue
Sulphur
Refinery Gas
Regular Mogas
Premium Mogas
Kero / Avtur
CO2
Automotive Gasoils
and Marine
Light Fuel Oil
Bunkers
Heavy Fuel Oil
Refinery Fuel
Bitumen 80/100
Bitumen 180/200
Bitumen 45/55
Refinery Gas
CDU1
CDU2
HVU1
BBU
HVU2
BDU
HCU
HMU
HDS2
Split HDT
Plat DePr
HDS1
Fuel
Gas
GasOil
Blend
Mogas
Blend
FuelOil
Blend
RG
RG H 2 RG
H 2
RG
H 2
RG
H 2
RG
Natural Gas
Components & Reformates
Condensates and Low Sulphur Crudes
High Sulphur Crudes
Imported Residues
High Sulphur Crudes
Low Sulphur Crudes
Imported Residues
Naphtha
Kero
LGO
HGO
Long Residue
Naphtha
Kero
LGO HGO
Long Residue
Sulphur
Regular Mogas
Premium Mogas
Kero / Avtur
CO 2
Automotive Gasoils and Marine
Light Fuel Oil
Bunkers
Heavy Fuel Oil
Refinery Fuel
Bitumen 80/100
Bitumen 180/200
Bitumen 45/55
HDS3
Ref-Split
BenSat
Section 6: Benchmarking
Section 10: Continuous Disclosure
Lisa Parkes