Channel Infrastructure advances Marsden Point Biorefinery

About Channel Infrastructure NZ Ltd

Channel Infrastructure NZ Limited (ASX: CHI) is New Zealand’s largest fuel import terminal business, headquartered in Whangarei and operating from the Marsden Point site in Northland. The company has a long history at Marsden Point, where the original refinery was established in 1964 and operated for nearly six decades. In 2022, following a strategic review initiated in response to sustained pressure on global refining margins that was further exacerbated by COVID-19, the company’s shareholders elected to cease refinery operations and convert the site to an import terminal. The business was renamed Channel Infrastructure in March 2022.

Today, Channel stores and distributes around 40% of New Zealand’s transport fuel, including 80% of its jet fuel, receiving cargoes via its deep-water harbour and jetty infrastructure at Marsden Point. More than 410 million litres of contracted tank storage sits on site, with fuel distributed either via the 170-kilometre pipeline to Auckland or by customers bp, Mobil and Z Energy via truck into Northland. Around half of the company’s revenue is fixed and independent of fuel throughput volumes, with all contracted revenue indexed to the Producer Price Index. Channel pays out 70–90% of normalised free cash flow as dividends over time.

In late 2025, Channel made its first international move, acquiring a 25% interest in the Somerton jet fuel pipeline that supplies Melbourne Airport, and in December 2025 the company completed a secondary listing on the ASX. The company also owns Independent Petroleum Laboratory Limited, which provides fuel quality testing services across New Zealand.

The announcement

Channel’s 13 July 2026 update contains two related but distinct developments: the completion of a key enabling works transaction, and a material expansion in the scope of the biorefinery project that Channel has been working towards with the Seadra consortium since October 2024.

On the enabling works side, Channel has entered an agreement with Integrate Scope DMCC for the sale and removal of the fully decommissioned CCR Platformer unit, a piece of legacy refinery infrastructure that needed to be cleared to make way for biorefinery construction. Net proceeds to Channel are US$5.95 million, with a deposit of US$1.2 million received on signing and the remaining balance to arrive in three instalments across FY27, in line with the deconstruction and shipping schedule. Importantly, the sale also extinguishes the roughly NZ$3 million demolition provision that had been held on the balance sheet for this unit, costs that are now no longer expected to be incurred.

On the biorefinery itself, the Seadra-led consortium has expanded its scope and its membership. Air New Zealand has joined as a consortium partner alongside Qantas, Renova, Kent, and ANZ NZ, reinforcing the project’s credentials as a cornerstone of New Zealand’s future sustainable aviation fuel supply chain. The project scope has also been broadened to include the manufacture of urea and other fertilisers from byproducts of the biorefining process, with Ballance Agri-Nutrients forming an alliance with the consortium to enable production and offtake of those products. In practical terms, the proposed biorefinery would now produce biodiesel, SAF and fertilisers from biogenic feedstocks, including agricultural and municipal sector byproducts and residues, a more integrated use of the site’s capabilities and domestic feedstock availability. The consortium will now move into the early contractor involvement (ECI) phase of project development with strategic partners to support final costing, scheduling and design assessments, with the expanded scope not expected to affect overall project timing.

Strategic significance

The Marsden Point Energy Precinct concept sits at the heart of Channel’s growth strategy. The company controls more than 350 million litres of tank capacity available for repurposing, a deep-water berth, the Auckland pipeline and 45 hectares of consented, freehold land, assets that are expensive to replicate and strategically important in a country that now imports all of its refined fuel. Channel’s role in that update is as landlord and infrastructure provider, not as owner or operator of the biorefinery itself, which limits its capital exposure while giving it long-term contracted revenue from land leases and infrastructure access fees agreed in principle at NZ$6–7 million per annum over 25 years, subject to periodic adjustment and binding agreement.

The addition of Air New Zealand alongside Qantas deepens the airline offtake support for SAF production, and Ballance Agri-Nutrients’ involvement in the fertiliser stream adds a credible domestic buyer for what would otherwise be a byproduct disposal challenge. Together, these developments extend the commercial logic of the project and reduce the risk that any single output market proves insufficient to support a final investment decision.

Conclusion

The CCR sale tidies the balance sheet, eliminates a demolition liability and physically clears the way for construction. The expanded consortium and broader product scope add commercial depth to a project that, if it proceeds to a final investment decision, would mobilise more than NZ$1 billion of private sector investment, create hundreds of jobs in Northland and restore fuel manufacturing at Marsden Point for the first time since 2022. The project remains subject to the successful conclusion of funding, binding commercial agreements and regulatory approvals, and the market will look for confirmation of a final investment decision as the ECI phase progresses.