New Zealand Pipeline Leak Worse Than Expected

By Ben Collins Features Dow Jones Newswires

WELLINGTON, New Zealand--A leak in a pipeline from a refinery that services New Zealand's busiest airport and is causing delays and flight cancellations is worse than expected.

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Refining New Zealand (NZR.NZ) last week suffered a leak in its pipeline from the refinery in New Zealand's north to Auckland, the commercial capital.

A number of flights have been cancelled on Monday in and out of Auckland International Airport (AIA.NZ) as well as other airports around the country, and airlines are having to fly in extra fuel.

Refining New Zealand said in a statement that it expected the repair could be made within two days by installing a clamp on the damaged section of the pipe. However, closer inspection has shown that the damaged section needs to be replaced.

"Our team is now preparing for this work," the company said Monday.

New Zealand Refining said the damage would probably mean it would make between 10 million New Zealand dollars and NZ$15 million less revenue in its current fiscal year, with the pipeline expected to run at a reduced capacity once it's fixed.

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New Zealand-based Z Energy (ZEL.NZ) said it was informed of the leak in the 170-kilometer-long pipeline on Thursday afternoon.

Z Energy said the impact of the pipeline outage on fuel supplies would depend on how quickly it could be fixed and it was liaising with Refining New Zealand on a daily basis.

Z Energy said that nationally, fuel supplies were healthy.

"The refinery is still operating, meaning fuel is still being produced and shipped around the country, supplemented by fuel imports as per usual," it said.

The chief executive of Auckland International Airport said 27 domestic and international flights were cancelled over the weekend, while flights travelled via other airports to refuel.

Write to Ben Collins at ben.collins@wsj.com

(END) Dow Jones Newswires

September 17, 2017 17:29 ET (21:29 GMT)