Bitumen is predominantly used for our road surfacing, featuring a mix of chipseal on lower-volume roads and asphalt on high-traffic roads; used as hot mix, emulsion, and, increasingly, in polymer-modified forms. By Alan Titchall.
Key suppliers and contractors include Higgins, Downer (Road Science), Highway 1, and Channel Infrastructure (ex-Refining NZ) in association with Higgins (through the new bitumen terminal at Marsden Point).
Bitumen had been produced at Marsden Point Refinery in Northland since the 1960s, under the auspices of (then) Shell and BP. These petroleum companies invested and installed bitumen storage tanks at coastal ports around the country. The bitumen specification and logistics network that evolved was designed around the Marsden Point Refinery’s small-batch manufacturing methods. These small batches were distributed by sea vessel to the tanks around the coast.
Before the Marsden Point refinery stopped processing crude oil and transitioned into a fuel import terminal on April 1, 2022, it made most (70 per cent or 100,000–120,000 tonnes annually) of our bitumen as a product of its oil refining process. Up until then, we imported most of the remaining 30 per cent.
Now we import all bitumen, primarily from the Asia-Pacific region, through a handful of importers mentioned above.
As in the past with importing crude oil, bitumen costs fluctuate through global demand, shipping costs, and with the value of our dollar. The current price of bitumen has risen due to the same pressures on it as fuels. But, relatively, it is still less than it was back in, say, June 2023, with a high in November of that year.
Although we use only between 165,000 and 170,000 tonnes of bitumen each year (depending on large projects), or about as much as China uses in a day, the NZTA, which controls most of our roading projects, has its own unique specifications.
While there are no quality issues with imported bitumen, importers must process or modify imports to meet this specification for bitumen through the additional blending of differing grades of imported bitumen feedstock.
Transport Agency contracts account for the vast majority of all bitumen consumed and NZTA M01 is the primary specification governing bitumen quality (unique to our country), while NZTA M02 covers bitumen emulsions which are increasingly used for chipsealing as a safer, lower-temperature alternative to traditional hot bitumen.
After Marsden stopped producing, the bitumen import market became a very ‘creative’ scene, with the NZTA at one stage proposing to import its own resource after it initiated a supply chain review to identify potential risks in the future bitumen market. This involved a Request for Information (RFI) to the local and international bitumen market.
At one stage, the NZTA told RNZ that its board had requested it to explore options for taking “a more active role in sourcing imported bitumen”.
The threat of government market intervention was enough to prompt Z Energy to withdraw from the bitumen market as a major player.
The obvious question of whether the Transport Agency had the expertise to negotiate bitumen deals on the world market hung in the air. Also, where was it going to store its bitumen once it arrived?
Eventually, the industry sorted out a complicated, if not confused, situation with its own commercial arrangements – from a ‘milk run’ of regular small loads from Marden Point in the past to larger infrequent imported loads.
Marsden Point had supplied two grades of bitumen (40/50 and 180/200) and everything used herein was either one of those grades or a blend of those grades. Globally, 40/50 is not readily available and hardly anyone else uses 180/200. So, while 180/200 can be imported, it comes at a premium.
Not surprisingly, our industry has adapted to importing a single grade and then processing it into various other grades, which also means each grade has a different price attached to it. Fulton Hogan and Higgins have invested in the plant and technology for this grade change, while Road Science has been doing so for some time.
While bitumen emulsions are not new and have been used worldwide for a long time, advances in technology mean they are far superior to older emulsions.
In recent times, our contractors have moved toward using emulsions for chipseals, away from Hot Cut Back binders. This has been driven by the NZTA procurement requirements for highway sealing operations, phased in over the past five years.
Along with the obvious burn risk associated with Hot Cut Back Binders (around 170°C), the flash point of kerosene (used in the binder to help with temporary viscosity change and adhesion) is about 38°C, so there is an explosive risk. Over past decades, the industry has developed a comprehensive code of practice with processes and procedures to make the use of hot-sprayed binders (cut back) safe – as long as the processes and procedures are followed, of course.
As the Transport Agency admits, emulsions are more expensive than cut-back bitumen and “often disadvantaged in a competitive market” but it is chasing the health and safety benefits and “better environmental outcomes”. Plus, emulsion can perform as good as hot-sprayed binder and have an advantage in its application at certain sites.
Over the past five years, the NZTA has dictated a transition to mandating the use of bitumen emulsions for all state highway works and has a mandate to “encourage and support” other road controlling authorities who currently do not use emulsions to transition to it.
Bitumen emulsion at a glance
The advantages of bitumen emulsion include its water content, which reduces viscosity and enables it to penetrate easily into cracks and tiny pores. Use of water instead of petroleum solvents makes it more compatible with the environment and causes less damage, and the fire hazard is much less.
It is also used at a safer temperature range of 8 to 50 degrees Celsius, and unlike cutback bitumen, emulsion bitumen can be applied on wet surfaces and cleaned easily with water just before it dries, while other types of bitumen require expensive special solvents.
There is no need for a ventilation system when using it in closed spaces.
One of the issues related to bitumen emulsion is the separation of bitumen and water during storage and transportation, so it must be protected from freezing when being stored and transported.
It is also easily washed by water, so should not be used on rainy days.
Since it is important to keep the bitumen emulsion stable, adding some additives like calcium chloride is necessary. Also, the storage tanks must feature a stirrer to keep the bitumen emulsion mixed at intervals.