Dairy giant Fonterra has been forced to shut down some of its sites because of a damaged gas pipeline in New Zealand, at a cost of of NZD20m (US$15.8m a day).
The New Zealand Herald reported that 30 million litres will be lost each day as gas pipeline operator Vector tries to fix damage to the Maui pipeline in North Taranaki, which has caused disruption to Fonterra’s Maungaturoto, Kauri and Tip Top sites.
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The gas shortage couldn’t come at a worse time for Fonterra farmers, who are at the height of a new milking season, The Herald added.
Fonterra said: “Vector has advised Fonterra that it is providing limited gas flows to some of Fonterra’s upper North Island sites. As a result Fonterra is working to get as many of these sites up and running as soon as possible.”
The dairy firm said it is still able to receive gas through a smaller backup line but the co-operative’s sites north of the Auckland Harbour Bridge will remain shut down.
Gary Romano, Fonterra managing director for trade and operations, said it could be between five and 16 hours before those sites with access to the gas supply can start processing milk again.
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By GlobalData“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.”
