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PORTPORT TARANAKITARANAKI LIMITEDLIMITED ANNUALANNUAL REPORTREPORT 20172017 CONTENTS Our Story 02 Chairman’s report 06 Our directors 08 Chief executive’s report CONTENTS 10 Our financial performance 13 Statement of corporate intent 14 Development and investment 16 Executive leadership team OUR STORY Our Place 18 Our community 20 Our health and safety OUR PLACE Our People 22 Chris Dillon 24 Chris Musgrave 26 Carlie Yukich and Sally Hoogeveen OUR PEOPLE 28 Ricky Hann 30 Paul Campbell Financial Statements 33 Financial statements FINANCIAL 62 Independent auditor’s report 64 Comparative review 65 Directory 3 PORT TARANAKI LIMITED ANNUAL REPORT 2017 011 CONTENTS found to be unsustainable without the volume of the total production of oil and gas in Taranaki. I containers from Fonterra’s Taranaki factories. am confident, however, that when commercial conditions change there is more petroleum to be The use of the former turbine hall of the now found and produced in Taranaki. defunct New Plymouth power station site for the storage of feed for the agricultural sector has This past year saw a change in the ownership CHAIR’S made valuable use of this asset. of the Kapuni field, historically the first major discovery of petroleum in Taranaki, bringing CONTENTS The petroleum industry has been part of the REPORT about the demise of what was the largest background to the development of the port operator of petroleum facilities in New Zealand since the first discovery of oil on the Moturoa - originally known as Shell BP and Todd Oil foreshore in the 1880s. The second era of Services Ltd and latterly as Shell Todd Oil Services petroleum exploration in Taranaki commenced Ltd. Shell Todd Oil Services Ltd has been a loyal in the 1950s and Taranaki still remains the and valuable customer of the port for more than only area of New Zealand to have discovered This is my final report as chairman of the of natural gas into methanol and liquefied 60 years and we thank them for their business. commercial quantities of this valuable resource. OUR STORY board as I am retiring from the board in petroleum gas (LPG) underpinning this trade. We look forward to working in the future with Port Taranaki’s development of the Newton King September. I have been a member of this their successor operating companies in the What is the port’s relationship with these two key Tanker Terminal in the 1970s was a direct result of Kapuni, Maui and Pohokura fields. board for 23 years, seven as chairman. industries today? the development of the Kapuni and Maui fields. I have had a close association with the We have witnessed during the past two In the mid-1990s, following the development of The upstream oil and gas industry has undergone business of the port for over 40 years and years a pulling back in exploration and oil the Kiwi Co-op Dairies Ltd plant at Hawera, the considerable change during the past 40 years. I feel privileged to have been closely field development activity as the petroleum port invested considerable capital in buildings, Initially there was tremendous activity throughout involved in the business community industry adapts to the marked reduction in the hard stand infrastructure and mobile plant to Taranaki in relation to the discovery and OUR PLACE international price of crude oil, the current natural of Taranaki through an exciting era of enable the packing and export of containers of development of the Kapuni onshore field and the gas supply and demand curves in New Zealand, development and change. milk powder. This container trade was really just a very significant discovery and development of and the on-going development of vast natural This past year has been another year of continuation of the historical export of Taranaki’s the offshore Maui field. These developments led gas resources in the USA, the Middle East and consolidation and re-positioning of the butter and cheese. It was a new way to export to construction of storage tanks, pipelines and Australia. The reduction in activity has had an company’s operations in accordance with its milk. The formation of the Fonterra Co-operative associated infrastructure at the port to enable inevitable flow-on effect of reducing the port’s strategic plan. Taranaki has recently experienced Group Ltd, and its national logistics solution the export of condensate, crude oil and LPG. offshore support activity. a dynamic and complex business environment, to export its products through other ports, has The subsequent development of the “think big particularly for the dairy and petroleum meant that today there are no longer container projects” established in Taranaki to manufacture What have these changes in trade, in all instances OUR PEOPLE tory S industries which in turn are so important to the vessels calling at our port. Recently, Fonterra put products from natural gas produced further resulting from decisions taken by our customers, UR performance of our business. I am aware that up for sale its iconic old cool store buildings on exports, particularly urea and methanol. As a meant for Port Taranaki? O result of the increase in urea use by New Zealand our entire team has worked extremely hard to Breakwater Road, further underlining the break The most obvious change as a result of our farmers it is no longer exported, rather it is achieve the outcome reported in this document with the past. The results of these changes are customers’ decisions has been a reduction in the imported. Methanol produced by Methanex at and on behalf of the board I thank them. that there is no longer the export of any dairy total number of ships calling at Port Taranaki. product across the wharves at Port Taranaki and Waitara and Motunui continues to be the most Our company has played, and will continue to important petroleum-based export both in terms The board and management of the company it is probable that soon there will be little visual FINANCIAL play, a critical role in the Taranaki economy. The have in recent times needed to adapt the evidence in the city of New Plymouth of this of volume and value and is, in effect, the means progress of our province on the back of pastoral operation of the business to meet the challenges once fundamental trade, a trade that was a key by which New Zealand exports natural gas. The farming and the export to the world of meat and of these changing times; to work more closely reason for the development of our port more initial oil and gas discoveries were followed by dairy products established a strong foundation to meet the needs of existing customers and to than 150 years ago. further seismic and drilling campaigns and the for our business. Today we are benefitting from on-going discovery and development of further seek out new customers. A recent example of the export of logs being harvested from farm The link to our farming industry continues fields both onshore and offshore, including the company taking pro-active steps to increase plantations and substantial exotic forests in through the import of feed for the agricultural the Pohokura field coming on-stream in 2006, trade was the purchase and refurbishment of Taranaki and well beyond. The past 40 years sector and our former container berth on the which has supported the on-going manufacture four storage tanks at the Omata tank farm, an of petroleum production has seen this industry Blyde terminal has become a dedicated yard of methanol. The on-going development of the associated pipeline to the Newton King tanker become the largest volume and value exporter, for the ever increasing storage and export of major oil and gas discoveries during the past 40 with the further products from the processing radiata pine logs. The export container trade was years has, however, seen an overall decline in 02 PORT TARANAKI LIMITED ANNUAL REPORT 2017 03 CONTENTS terminal and a loading arm on the terminal, produce across the wharves at Port Taranaki to an contribution to the board and our shareholder personally thank everyone for the support I have all of which have now been leased to BP with increasingly hungry world. for the past 10 years. In November 2016 the received during the past seven years. I wish the the intended result being the importation into board welcomed the appointment of Taranaki board, management and workforce all the very Port Taranaki is, as with all successful companies, Taranaki by ship, rather than by road tanker, of regional councilor, Charlotte Littlewood, as a new best for the future and will watch with interest the ultimately a business based on its people. I all petrol and diesel necessary to fuel the member of the board. future strategic direction of the company in the am especially proud of the progress we have Taranaki economy. ever-changing port industry. made to ensure the health and safety of all who I thank the board, Guy Roper and his senior For a company to be sustainable it must be able work within our gates, and within the wider leadership team for their support and willingness CONTENTS to adapt so as to ensure that it continues to community. Hundreds of logging trucks and to vigorously debate the issues of the day, provide value not only for its customers but also other vehicles, and up to five thousand people, and to take the often difficult steps necessary for its shareholders and the wider community. pass through our main gate each week! to prepare the company for the business of tomorrow. We are fortunate to have people right Employees can also take pride in being part of Our people and our customers will continuously across the company, in our shareholder, and the John Auld a successful company.

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