Channel Infrastructure lifts outlook, links new BP storage deal

Channel Infrastructure has raised its earnings outlook due to new fuel storage deals at Marsden Point. The company, which owns the former Marsden Point oil refinery site and now operates as a fuel import terminal for Auckland and Northland, reported a 4 percent increase in half-year revenue to $72.9 million, with net profit rising to $18.2 million from $11.6 million.

Operating earnings remained flat at $48.8 million. The company upgraded its full-year EBITDA guidance to $103 million to $108 million, from the previous range of $97 million to $105 million.

In the past six months, Channel Infrastructure added 123 million litres of jet and diesel storage at Marsden Point, increasing in-service storage by about 40 percent. This included a 93 million litre diesel storage project for the New Zealand Government, which was completed in just nine weeks. Chair James Miller said the company was converting new projects into long-term revenue.

The company also announced a 15-year contract with BP for additional jet and diesel storage at Marsden Point, expected to generate around $130 million in revenue over its first 15 years. Construction costs for the new storage are projected to be $65 million to $70 million from 2026 to 2028, using existing debt facilities. Chief executive Rob Buchanan highlighted the increased focus on energy security as opening up more opportunities for Channel to utilize its existing infrastructure.

The full-year contributions from Z Energy jet storage and a Higgins bitumen import terminal are expected to add about $9 million to FY27 EBITDA, while the Government diesel storage contract could contribute about $14 million. However, a final investment decision on the proposed Marsden Point Biorefinery is now expected to be delayed until 2027, as the consortium's equity raising process is taking longer than anticipated.