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Unions representing ship crews says the removal of two New Zealand coastal tankers by petrol companies is disappointing and has damaged New Zealand’s maritime industry.

Two New Zealand coastal tankers MT Matuku and MT Kokako have been taken off the New Zealand coast and are heading overseas, after being reflagged to the Marshall Islands registry.

The decision was made by petrol companies who are now using a radically new and untested model of direct imports on overseas vessels from Asian refineries.

The fuel security campaign led by several maritime unions and professional bodies had requested the Government to step in to keep two New Zealand coastal tankers in service as floating storage units.

Maritime Union of New Zealand National Secretary Craig Harrison says the decision has resulted in the loss of around 80 seafaring jobs and training opportunities for young seafarers.

He says there must be immediate action from the Government to prevent a further loss of skilled maritime workers in coastal shipping which is in a critical state.

The two New Zealand tankers had been chartered by Coastal Oil Logistics Limited (COLL) to transport petroleum products from the now closed Marsden Point Refinery to New Zealand ports on behalf of its shareholders BP, Mobil and Z.

The vessels were managed by New Zealand operator Silver Fern Shipping Limited and owned by international operator ASP Ship Management Group, which chartered them to COLL.

Mr Harrison says the prime motive for refining and petrol companies are returns to shareholders, not what is in the national interest of New Zealand.

He says the international tanker market is in turmoil as the war in Ukraine disrupts global trade and sanctions take effect.

“The Ukraine war has destabilized the global energy market and shipping, and we have further tensions in the Asia-Pacific region.” 

Mr Harrison says unions want to work with the Government and the shipping industry and “Just Transition” workers into a coastal shipping industry that helps our domestic freight task and decarbonizes our transport network through low emission coastal shipping.

The campaign for fuel security Save Our Tankers is comprised of the Maritime Union of New Zealand representing seafarers, the New Zealand Merchant Service Guild representing ship’s masters and officers, and the Aviation and Marine Engineers Association representing marine engineers.

The outbreak of war in the Ukraine will have major implications for New Zealand fuel security, say maritime industry representatives.

Maritime Union of New Zealand National Secretary Craig Harrison says global energy markets have been thrown into turmoil by the outbreak of war.

He says as well as continuing rises in fuel prices, the role of Russia as a major oil and gas exporter meant global supply chains are being hit by another shock.

In 2021, Russian exports accounted for 5.2% of global seaborne trade on Tankers (oil and refined oil products), and 6.0% of global seaborne trade on Liquified Natural Gas (LNG) Carriers, according to shipping industry sources. 

“The disruption to trade and sanctions on Russia will have repercussions on the availability, cost and reliability of overseas fuel tankers coming to New Zealand.”

Following the announced closure of the Marsden Point oil refinery, individual petrol companies are planning to import fuel directly to New Zealand ports on overseas tankers, removing New Zealand’s two domestic tankers the MT Matuku and MT Kokako.

Mr Harrison says New Zealand holds fuel reserves in the form of “tickets” that in theory guarantee access to overseas fuel stocks.
He says during the inevitable disruption of the global tanker market, these reserves might not be easily accessible.

“The problem is New Zealand is relying on assumptions and assurances from petrol companies that look pretty flimsy when you measure them against the current global situation.”

Oil tanker futures prices in the April-June period rose by around 20 per cent on major global routes as the invasion of Ukraine increased the likelihood of sanctions limiting available tonnage supply and altering oil trade flows, according to maritime media reports.

Mr Harrison says the continued use of dedicated New Zealand crewed and flagged fuel tankers is an essential part of fuel security in an increasingly volatile global situation.

“New Zealand fuel tankers provide guaranteed service, reliability and also can be used to hold fuel stocks locally.”

Mr Harrison says the Save Our Tankers campaign has met with Deputy Prime Minister Grant Robertson and the Minister of Transport and is urging Government to ensure New Zealand coastal tankers are kept in service to protect national fuel security.

The campaign for fuel security Save Our Tankers is comprised of the Maritime Union of New Zealand representing seafarers, the New Zealand Merchant Service Guild representing ship’s masters and officers, and the Aviation and Marine Engineers Association representing marine engineers.

The maritime sector says a simple change to maritime transport laws could protect New Zealand’s fuel security.

Following the controversial closure of the Marsden Point refinery, petrol companies plan to remove New Zealand’s coastal tankers in favour of overseas tankers, with no guarantee of reliability or backup plan if things go wrong.

Three organizations representing maritime professionals are calling for action to protect New Zealand’s fuel security –  the Maritime Union of New Zealand represents seafarers, the New Zealand Merchant Service Guild represents ship’s masters and officers, and the Aviation and Marine Engineers Association represents marine engineers.

Maritime Union of New Zealand National Secretary Craig Harrison says the decision to remove coastal tankers will provide marginally higher profits to already profitable petrol companies at the cost of fuel security.

He says the important role of domestic shipping capability in the fuel supply chain must be preserved.

Mr Harrison says minor changes to section 198 of the Maritime Transport Act could direct New Zealand coastal tankers be given priority for coastal deliveries of oil.

This could mean using Marsden Point as a storage hub for New Zealand fuel supplies and maintaining the current two New Zealand flagged oil tankers.

Mr Harrison says dedicated New Zealand coastal tankers ensure fuel security through reliable scheduled visits to New Zealand regional ports.

He says current shipping delays with international vessels calling at New Zealand ports shows dependency on overseas shipping is a high risk to regional economies.

For example, a delay or interruption to delivery of fuel to South Island ports would create a huge issue with the primary sector’s ability to function, he says.

“Dedicated New Zealand coastal tankers provide a ready-made mobile storage facility, would be immediately available in event of local emergency to deliver fuel, and provide a back-up option if overseas shipping is disrupted.”

The unions are in talks with the New Zealand Government on the issue.

There are concerns in the maritime sector that petrol supplies could be affected by the same type of shipping disruptions creating chaos in other supply chains.

The Maritime Union of New Zealand represents seafarers, the New Zealand Merchant Service Guild represents ship’s masters and officers, and the Aviation and Marine Engineers Association represents marine engineers.

The three unions say ongoing supply chain congestion is showing no signs of let up in 2022 and many industries are suffering as a result, from the import of building supplies to primary produce exporters.

Maritime Union of New Zealand National Secretary Craig Harrison says a reliance on overseas shipping and the running down of New Zealand’s shipping capability had led to a “perfect storm.”

Mr Harrison says it is extremely concerning that New Zealand coastal tankers were now under threat as well, following the decision to close Marsden Point refinery.

New Zealand tankers currently deliver fuel to New Zealand ports from Marsden Point.

However, the vessels are under immediate threat of being replaced by petrol companies using direct imports from overseas tankers.

The two current New Zealand oil tankers are chartered by Coastal Oil Logistics (COLL), a joint venture between New Zealand’s major petroleum suppliers BP Oil New Zealand Limited, Mobil Oil New Zealand Limited and the Z Energy Group, who are also major shareholders in Refining NZ, who operate Marsden Point.

Mr Harrison says it is bizarre that at a time when international shipping was in chaos, that New Zealand was “sleepwalking” towards a similar situation with fuel imports.

“It is essential the same problems occurring in the container trade are not allowed to replicate with New Zealand fuel supplies.”

He says New Zealand coastal tankers provided a dedicated service and a level of redundancy which could not be guaranteed by overseas shipping, despite what petrol companies said.

There are numerous scenarios where outside situations could result in disruption and delays with overseas shipping, he says.

Mr Harrison says one straightforward solution to shipping congestion would be to rebuild New Zealand domestic shipping capability to ensure regular and reliable services to regional ports, reducing the reliance on overseas shipping.

“This includes keeping New Zealand coastal oil tankers in service to reduce the risk of delays or service failure.”

A new campaign had been set up to raise awareness of the situation including the website fuelsecurity.nz

Joint media release Maritime Union of New Zealand/New Zealand Merchant Service Guild/Aviation and Marine Engineers Association FOR IMMEDIATE RELEASE Monday 17 January 2022

Three unions representing New Zealand shipping crews are mounting a united campaign to protect New Zealand’s fuel security and save New Zealand coastal tankers.

The Maritime Union of New Zealand represents seafarers, the New Zealand Merchant Service Guild represents ship’s masters and officers, and the Aviation and Marine Engineers Association represents ships engineers.

All three unions say the removal of New Zealand coastal tankers from service is an unacceptable risk to New Zealand’s fuel security.

The impending closure of the Marsden Point refinery will have a flow-on effects to fuel distribution in New Zealand.

One of these is petrol companies intend to import refined fuel directly to New Zealand ports using overseas shipping.

For many decades, bulk refined fuel has been distributed throughout New Zealand from Marsden Point through two main methods – a pipeline to Auckland, and by New Zealand coastal tankers to regional ports.

Silver Fern Shipping is the operator of New Zealand’s two coastal tankers MT Kokako and MT Matuku and advised crew in late 2021 it planned to take the vessels out of service around April 2022.

The two vessels are contracted solely to Coastal Oil Logistics Limited (COLL) to deliver fuel from Marsden Point refinery to New Zealand ports. COLL is a joint venture between the major petrol companies.

Following the closure of Marsden Point refinery, petrol companies say they will import refined fuel directly to New Zealand ports from overseas refineries in Asia using overseas shipping.

The campaign for fuel security has identified multiple risks in this course of action.

Maritime Union of New Zealand National Secretary Craig Harrison says by removing New Zealand coastal tankers from service, New Zealand will become completely dependent on overseas shipping for fuel supplies.

He says at a time when international shipping is experiencing major congestion and delayed schedules, exposing New Zealand to greater risks is a bad decision.

Merchant Service Guild National Vice President Iain Macleod says the removal of New Zealand coastal tankers will reduce New Zealand maritime transport capability.

He says coastal tankers employ and train a skilled New Zealand seafaring workforce which is essential for a maritime trading nation such as New Zealand.

Aviation and Marine Engineer’s Association National Industrial Organiser Steve Westoby says New Zealand seafarers including engineers have an exemplary record of safety and reliability over decades of service on New Zealand coastal tankers.

He says New Zealand coastal tankers would be available to assist in any emergencies or disruption to fuel supplies, such as had occurred with the failure of the Marsden Point to Auckland pipeline in 2017.

The three unions say that New Zealand coastal tankers could remain in service by extending their operations to importing refined fuel from overseas.

Mr Harrison says it will be some time before oil-based fuels are phased out and New Zealand needs to maintain fuel security in a volatile global situation.

He says the Government needs to review fuel security measures in this unprecedented change to our fuel networks and ensure New Zealand coastal tankers remain in service.

For more information contact:

Maritime Union of New Zealand National Secretary Craig Harrison on 0274225238

New Zealand Merchant Service Guild Vice President Iain MacLeod on 021 431 354

Aviation and Marine Engineers Association National Industrial Organiser Steve Westoby on 021 747 354