About Z

Z welcomes change of heart on Timaru tanks

26/04/2012 - General News

Z Energy

Z Energy today said the decision to return 20 million litres of bulk fuel storage to service in Timaru was a very good outcome for New Zealand and for customers in the area.

In May 2010, Chevron closed its fuel storage terminal at Prime Port in Timaru, halving storage at the Port and leaving Z with the only operational tanks servicing the South Canterbury region. As a result, diesel supply in South Canterbury has been insufficient to meet the region’s demands.

Z Chief Executive Mike Bennetts said Z had been unsuccessfully trying to lease or buy Chevron’s tanks to boost fuel storage in South Canterbury and in late 2011 decided to raise the issue publicly to try and force a decision on the issue.

“The situation in Timaru was simply untenable. Port diesel supplies were insufficient to meet the region’s demand 90 per cent of the time and diesel was being routinely trucked from outside the area to try and meet demand.

“Customers were running out of fuel, especially at the height of the agricultural production season, and the lack of infrastructure was starting to compromise the region’s economic development.

“Additionally, when the Christchurch earthquakes hit, it was only Z’s tanks at Timaru which kept the city supplied.”

Mike Bennetts said Z had started a tank swap project at Timaru to deliver an incremental gain in diesel supplies which had now been halted because of the pending return of Chevron’s tanks.

“We welcome Chevron changing its mind and doing the right thing for South Canterbury and for New Zealand.”

Mike Bennetts said while this is a very good outcome, the situation in Timaru is symptomatic of what’s been quietly happening across New Zealand’s fuel supply chain for decades.

“Terminals and tanks have been progressively closed by the global companies as they have been redirecting capital to higher returning markets around the world, with the end result being a supply chain which is too tight, which lacks resilience, is increasingly dependent on trucking fuel and struggles to meet contingency situations.

“Z is committed to leading the investments that the New Zealand supply chain needs and we’re committed to changing the way the industry operates to enable this to happen.”