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“Over the reef” fuel project ongoing

Monday September 01, 2014 Written by Published in Local

A joint proposal to supply Rarotonga with bulk fuel from a large tanker through an “over the reef” pipeline is continuing to work its way through government bureaucracy.

Pacific Islands Energy - a foreign-based firm currently supplying jet fuel for the aviation industry and diesel for energy utility Te Aponga - and overseas shipping company Petrocean are backing the plan, which they say will result in cheaper fuel for consumers.

Local Manager Mark Vaikai with Pacific Islands Energy said the project is being steered by a government task force, which he says has identified merits in their plan.

The proposal will be going through a public consultation process and undergo an Environment Impact Assessment (EIA), with possible cabinet approval, he said.

“The proposal by shipping company Petrocean for a MR (medium range) fuel tanker mooring and pipeline is a fantastic opportunity that our company is certainly backing,” wrote Vaikai in an email. “This proposal offers lower costs associated with bulk delivery and handling of fuel when compared to current means of supply.”

Vaikai said a tanker routinely passes the Cook Islands to deliver fuel to Tahiti, which could potentially stop en-route to deliver fuel for the local market – resulting in cheaper petrol prices for consumers.

 “The main thing for us is reducing the costs of fuel,” he said. “You can’t reduce the wholesale price ... but you can improve on logistics.”

According to a recent report by the Secretariat of the Pacific Community (SPC), Cook Islanders pay some of the highest retail prices for petrol and diesel in the Pacific Region.

 “As a consumer myself I personally would like to see lower fuel prices at the pump and that’s why I would personally support any sound incentive such as what Petrocean is offering,” he said.

Should the proposal eventually seek official approval, Vaikai said his company will be adding a fuel tank at their Panama headquarters to take advantage of bulk delivery.

“... this is timely as our current storage was built about 40 years ago and is now insufficient to cater for both current and future demands of fuel,” he said. 

Currently, petrol for motorists arrives in Rarotonga via containers aboard shipping vessels.

Despite Pacific Islands Energy’s stated intentions, their manoeuvres – including an application to provide diesel to foreign fishing vessels – have been criticised by Triad Pacific Petroleum’s Director Chris Vaile, who says the company is looking to monopolise the market.

 Vaikai vigorously denies the claim.

“Our expansion plan is essentially a necessary part of the Cook Islands present/future infrastructure development, but using foreign investment,” he said.

“Our country’s demand for energy has been increasing proportionately with positive development. Obviously there’s an urgent need to reduce the cost for that energy and here we are being presented with an opportunity. Opportunity does not wait around for long.”

Vaikai has previously stated his company has advised Government and the Business Trade and Investment Board that it has no intentions to enter the ground fuel retail market currently the dominated by Triad and Toa Petroleum.

He said he would like to discuss his company’s strategy with Triad to “iron-out any misunderstandings”. 

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