Channel Infrastructure NZ Limited (ASX:CHI) has announced the finalisation of contractual details with the New Zealand Government for significant additional diesel storage at its Marsden Point Energy Precinct. Channel Infrastructure is New Zealand’s largest fuel import terminal business, storing and distributing 40% of the nation’s transport fuel, including 80% of its jet fuel. It receives, stores, tests, and distributes petrol, diesel, and jet fuel that its customers import and supply to Auckland and Northland. The agreement secures 93 million litres of diesel storage capacity, equivalent to approximately nine additional days of New Zealand diesel demand, until 31 December 2027. This expanded capacity is on track for availability by 31 May 2026, having been brought into service on an accelerated basis.
Under the terms of the agreement, Channel Infrastructure anticipates generating incremental revenue of $1.2 million per month from the capacity availability date. Given the short-term nature of the contract, this revenue will not be subject to any PPI adjustment. The preparatory works, which have already commenced with teams engaged seven days a week, involve tank cleaning, the construction of linework to connect the tanks into Channel’s diesel infrastructure, and the installation of instrumentation and pumping systems. These necessary upgrades are less extensive than a full tank refurbishment and are being funded within the company’s existing debt facility headroom.
Rob Buchanan, Channel Infrastructure’s Chief Executive, highlighted the company’s crucial role in bolstering New Zealand’s energy security. He commended the team for devising an expedient solution to deliver substantial diesel resiliency within a highly compressed timeframe. While the new storage contract is expected to deliver approximately $8 million in additional revenue in 2026, the company has retained its full-year 2026 EBITDA guidance of $95 million to $100 million. This decision reflects ongoing uncertainty surrounding fuel demand in the current high fuel price environment. Channel Infrastructure plans to provide a further guidance update at its Annual Shareholders Meeting on 6 May 2026.
