Source: Radio New Zealand
Marsden Point. RNZ / Peter de Graaf
The government has made a deal to store additional diesel at Marsden Point.
Channel Infrastructure was contracted to increase diesel storage capacity by 93 million litres, which was the equivalent of about nine additional days of diesel demand.
Chief executive Rob Buchanan said work was already underway to upgrade the storage facilities, which were expected to be ready to receive the additional diesel from 31 May.
Channel expected to generate additional revenue from the increased capacity, in the order $1.2 million a month over the short-term agreement, which runs until 31 December 2027.
“We applaud the government’s decisive action to secure the critical fuels New Zealand needs to keep the economy moving and look forward to playing our part to help make New Zealand’s fuel supply chain more resilient,” Buchanan said.
Upgrade works involved tank cleaning, the construction of linework to connect the tanks into Channel’s diesel infrastructure and the installation of instrumentation and pumping systems.
Buchanan said the required work was significantly less than for a full tank refurbishment, which would typically take between 18 to 24 months, and the cost was therefore able to be funded within Channel’s existing debt facility headroom.
The agreement with government provided for reimbursement of Channel’s costs if the government elects to not proceed with the additional storage capacity prior to the capacity availability date.
The new storage contract was expected to deliver additional revenue of about $8m in 2026, though uncertainty remained around fuel demand.
Channel underlying profit guidance for the full year ending in December 2026 of between $95m – $100m was unchanged.
Guidance would be updated again at Channel’s annual shareholders meeting on 6 May.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
