Fonterra fears NZ $20m daily milk loss due to massive gas leak

By Ben Bouckley

- Last updated on GMT

Related tags New zealand

Fonterra fears NZ $20m daily milk loss due to massive gas leak
Fonterra says it fears it will lose around NZ $20m of milk a day after it was forced to close 15 of its 17 processing sites on North Island, following a break in a gas pipeline on Monday that led to operator Vector requesting that businesses do not use gas.

This is according to Radio New Zealand, which noted that the shutdown had come at the worst possible time for Fonterra's farmers, who are heavily involved in the new spring milking season.

A Fonterra spokesman told Radio New Zealand on Tuesday that dairy cooperative was collecting about 35 million litres of milk daily in affected areas, but only had the capacity to process around 5m litres at plants in Waitoa and Te Awamutu, which are able to run on coal for milk processing.

In a statement today Fonterra said that gas provider Vector was providing limited gas to some of its North Island sites. "As a result Fonterra is working to get as many of these sites up and running as soon as possible,"​ the company said.

But the company added that since the main Taranaki gas line was still out of operation, Fonterra's sites north of the Auckland Harbour Bridge (Maungaturoto, Kauri) as well as Tip Top would remain shut down.

Fonterra Trade and Operations MD Gary Romano said it could be between 5 to 16 hours before those sites with access to the gas supply can start processing milk again.

"Given we are one of the 200 businesses receiving gas from this smaller line, we will need to restrict our use and scale back our processing capabilities to avoid gas supply being cut off again," he said.

"As our sites come up and running we will need to process the milk currently in the silos at the sites but we also expect to be able to collect and process milk from some farmers in the Waikato and Bay of Plenty from tonight. Our Service Centre will contact those farmers whose milk will be collected this evening."

It is unclear whether the gas supply issue will impact will affect Fonterra's dairy exports to regions such as the EU, since the company did not respond to's request for comment.

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