Airlines cancel NZ flights, ration fuel after pipeline leak

Bloomberg

Airlines are cancelling flights in New Zealand and adding stops for long-haul services after a pipeline bringing jet fuel to Auckland airport was closed due to a leak.
Air New Zealand estimated 2,000 customers a day will be affected by the disruption over the next few days as it has just 30 percent of normal fuel volumes available to it. The airline said on Monday it has cancelled 18 flights so far and further schedule changes will be necessary. Qantas Airways has cancelled some flights within New Zealand and to Australia as it is also forced to ration fuel.
The disruption comes just days
before New Zealanders vote in a
September 23 general election that polls show is too close to call. While motorists aren’t affected at this stage, the government has deployed a naval tanker to help with fuel distribution after opposition parties claimed there had been a failure to secure supply to the nation’s busiest airport.
“It’s been made very clear to all of those working on this that the government will commit whatever resources and effort are required to get this sorted out as quickly as possible with a minimum of disruption,” Energy Minister Judith Collins said in a statement. The naval tanker will assist by shipping diesel around the country so resources can be freed up to focus on Auckland Airport, she said.
The leak was found in a 170-kilometre pipeline, owned and operated by Refining NZ, which connects New Zealand’s only oil refinery north of Auckland with a terminal near the city’s airport. The damaged section needs to be replaced and it will take until early next week to reopen the pipeline plus another few days of testing before fuel can be delivered to the airport, the company said.
Initial estimates are that about 70,000 litres of jet fuel were lost.
“We’ve recovered all the fuel, so at least we’re not talking about an environmental issue today,” Refining NZ Chief Executive Sjoerd Post told Radio New Zealand on Monday. “We are absolutely sorry to New Zealand and to Auckland that this is happening.”
Refining NZ provisionally estimated the outage will cost as much as
$11 million in revenue from reduced pipeline income and reduced operation of parts of the refinery. Shares in the company fell 2.4 percent at 4:30 pm in Wellington. Based on information available at this stage, Air New Zealand said the fuel supply issue is unlikely to have a material impact on earnings for the year through June 30. The airline’s shares dropped 1 percent.