Option 'on the table' to send jet fuel to Auckland Airport by rail, says Z

Tuesday, 17 September 2019

Z Energy says it could transport jet fuel to Auckland Airport by train to reduce reliance on the Auckland fuel pipeline, which ruptured in 2017.

A Government inquiry into the Auckland fuel pipeline crisis warned on Tuesday that fuel supplies to the airport were not sufficiently secure, and investment in extra infrastructure was needed 'without delay'.

The inquiry headed by chairwoman Elena Trout said fuel companies BP, Mobil and Z should be given until June to commit to increasing storage at the airport, and the speed at which they could replenish it, or the Government should step in.

Rail could be the solution to beefing up Auckland Airport's fuel supply-line.

Fuel companies, airlines and Auckland Airport are discussing installing extra fuel storage tanks at the airport and at a nearby facility at Wiri at a likely cost of tens of millions of dollars, Board of Airlines Representatives (BARNZ) executive director Justin Tighe-Umbers said.

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That would be sufficient to see airlines through a 10-day outage of the pipeline linking the Marsden Point oil refinery and the airport with only 'a small amount of fuel rationing', he said.

That would appear to meet one of the inquiry team's recommendations.

But Tighe-Umbers said BRANZ still had no certainty about when new tanks might go in, so it was pleased to see the inquiry suggest a June deadline for an investment decision.

BP New Zealand managing director Debi Boffa said on Tuesday that BP had 'committed funds to be invested' in additional storage at the Wiri Oil terminal near the airport.

Z Energy spokeswoman Victoria Crockford said an option set out in the inquiry's report to transport fuel by train from the Marsden refinery to Auckland Airport also remained 'on the table'.

The report said a rail supply-line would require the conversion of tanks at Mount Maunganui to store jet fuel, the construction of new loading and unloading facilities there and at the airport, and new infrastructure to transport jet fuel from the rail siding at Wiri to the airport.

Z told the inquiry it had spoken to KiwiRail and the option was 'operationally feasible', but the inquiry said the investment would take 'several years' and indicated it would be expensive.

'The fundamental question was whether this represents a reasonable amount to spend on improving resilience for a high-cost, low-probability event like the 2017 pipeline outage,' the government inquiry reported.

But it emphasised fuel-supply risks for the airport were growing.

'In its current state, parts of the supply chain will not be able to meet basic demand in a few years' time, let alone recover from, or provide resilience during, an outage of any significant size,' the report said.

'There is limited storage near the airport to provide cover for an outage and the number of days of cover that storage provides is decreasing as the daily demand for jet fuel grows. This means our vulnerability is increasing.'

Tighe-Umbers said BARNZ saw extra fuel storage at the airport and an investment in an improved supply-line as 'complementary'.

While there might be some trade-off between storage capacity at the airport and the ability to transport more fuel to the airport faster, a rail or truck link would not the remove the need for additional fuel storage at the airport, he said.