Chief executive Thomas Zengerly said the Marsden Point refinery, south of Whangarei, saved the country about NZ$220 million of foreign exchange through it refining activities, supplying 78% of New Zealand’s liquid fuels demand.

However, the climbing kiwi dollar - which started 2003 at an exchange rate of US$0.52 and ended the year at US$0.70 - reduced refining income by some NZ$18 million as NZRC’s refining income is based on US dollar-based international crude and product prices.

In addition, the company faced a power bill that exceeded budget by NZ$11 million budget because of the 2003 winter power crisis - with volatile wholesale and particularly spot prices during May-July.

Company chairman Ian Farrant said the quadrupling of power prices, lack of reserve capacity and reliability problems highlighted “the fragility of electricity supply in New Zealand”.

Partly because of the uncertain power supply scenario, NZRC had started a feasibility study into an onsite co-generation plant during last year. A crucial element of this project was the long-term availability and price certainty of alternative fuels.

Zengerly said a NZ$22 million maintenance shutdown - one of the largest in the company’s history - was planned for a 30-day period starting in May. This was to inspect and repair many processing units and replace catalysts.

The refinery produced 4.75 million tonnes of refined product, 45% of which was carried by the Marsden Pt-Wiri (Auckland) pipeline. The Middle East and Far East supply 76% of all product processed at Marsden Pt.