Refining NZ fell on Monday after the company said a leak at its pipeline supplying jet fuel to Auckland airport that has sparked flight cancellations will take longer to repair than expected.
The pipeline, which is the main source of aviation fuels into New Zealand’s largest city, is believed to have been ruptured by a digger working on a farm.
Refining NZ, which owns the pipeline and New Zealand’s only oil refinery, said closer inspection of the pipeline showed that the damaged section will need to be replaced, instead of plans to clamp the leak.
The company said it is preparing for the work and that once the repair is complete, the pipeline will initially run at 70 to 80 per cent capacity. Refining NZ shares fell as much as 4.4 per cent in New Zealand. The company’s major shareholders are BP, ExxonMobil and Z Energy.
Refining NZ said it expects the reduced pipeline income and reduced refining income as a result of the leak to have a revenue impact of between NZ$10m and NZ$15m ($7.3m to $10.9m).
Auckland airport said around 27 domestic and international flights had been cancelled over the weekend.
Air New Zealand said it was experiencing disruption following the leak as the volume of jet fuel available was 70 per cent lower than usual. The airline said around 2,000 passengers would be affected on Monday.
Air New Zealand said some long-haul services to and from Asia and North America will make refueling stops at airports in Australia or the Pacific, such as Fiji.
The airline’s shares fell as much as 2.2 per cent on Monday in New Zealand. Z Energy was down 0.8 per cent and Auckland International Airport was up 2 per cent.