10 Jan 2023

Drink-makers' concerns bubbling to surface after Todd Energy Kapuni outage

5:32 am on 10 January 2023
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The original Kapuni plant was built 50 years ago, bringing high-paying jobs to the region. Photo: RNZ / Robin Martin

The temporary closure of the Kapuni liquid carbon dioxide plant is highly concerning for drink-makers, as domestic gas supplies have already been cut back.

The Todd Energy site in Taranaki has been New Zealand's only domestic producer of food-grade CO2 since the Marsden Point refinery was decommissioned last year.

The Kapuni plant was closed, due to safety concerns, just before Christmas, and there is no reopening date yet.

Beverage Council spokeswoman Belinda Milnes told RNZ: "Since the closure of Marsden Point, that reduced the supply domestically in New Zealand quite a bit.

"This latest decrease in supply with the plant going off temporarily is a real worry for us, because it's so tight already."

Milnes said CO2 was a "very difficult product to import" to supplement domestic production.

"Because the containers are very heavy ... So we're really hoping that this can be sorted out really quickly."

Todd Energy is a subsidiary of the Todd Corporation owned by one of New Zealand's wealthiest families.

The original Kapuni plant was built 50 years ago.

South Taranaki koromatua mayor Phil Nixon said the plant had brought high-paying jobs to the rural district ever since.

"There are some very specialised people there, with the operation of the plant, the maintenance of the plant. We've got a lot of very highly skilled engineers and that throughout Taranaki, so it is really important to us in a lot of ways."

He had visited the site before, and said safety was taken extremely seriously.

"It is a very well-maintained and run plant. And obviously, safety is always to the fore with them [Todd Energy]. And so the current situation where they're being proactive, rather than reactive, I think is very good."

Taranaki Chamber of Commerce chief executive Arun Chaudhari said there had been consistent demand for the Kapuni CO2 for years.

"With the shutdown, at Todd Energy, you can see the vacuum - the longer it continues, the bigger the problem gets for these industries [needing the gas]".

But he said it was a great opportunity for New Zealand to look, in the long-term, at introducing carbon capture and storage (CCS) technologies used overseas to supply CO2.

"If you capture it, and you can use it for these [processed] purposes, you're winning."

Briefing notes show Cabinet ministers were warned the loss of CO2 byproducts from Marsden Point would put pressure on liquid CO2 supplies, in a paper titled 'Fuel supply resilience without a domestic oil refinery' in November 2021.

The document said: "While there are other potential CO2 sources, including imports, closure of the refinery will challenge the CO2 supply chain - particularly [with] a short lead time to make necessary investments or relocate plant."

Marsden Point oil refining's end means potential major water rates increase for Whangārei

The decommissioning of the Marsden Point refinery, south of Whangārei, left Kapuni as the sole domestic liquid CO2 supplier. Photo: LDR / Northern Advocate / Michael Cunningham

National's energy spokesman Stuart Smith believed when the Northland refinery was decommissioned, leaving a sole domestic liquid CO2 supplier at Kapuni, government ministers overestimated Aotearoa's energy resilience.

"[They] overestimated their ability to decarbonise. They haven't understood. They've tried to actually burn their bridges, when they need them."

The owners should not have been forced to keep the refinery CO2 production going at Marsden Point, Smith said.

"We should have had a much better and more considered approach to whether the refinery could have been assisted in any way that would have allowed them [Refining NZ] to keep it open.

"Ultimately, government decisions did have an impact on the decision-making process," Smith said.

The original Kapuni gas plant was built 50 years ago.

While Aotearoa is trying to reduce carbon dioxide emissions, the processed gas from Kapuni is a different form, used by domestic, commercial and industrial appliances, on sites ranging from food and beverage factories to hospitals and water treatment plants.

WorkSafe's petroleum and geothermal team has been notified of the problems at Kapuni, but the health and safety regulator is not directly involved.

WorkSafe told RNZ it supported Todd Energy's approach.

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