Highlights:

  • Government secures 93 million litres of diesel storage, adding ~9 days of national demand
  • Project expected to generate ~$1.2 million monthly revenue for Channel
  • Storage to be operational by 31 May 2026 under accelerated timeline

Overview:
Channel Infrastructure NZ Limited (NZX:CHI) has finalised an agreement with the New Zealand Government to provide additional diesel storage at Marsden Point Energy Precinct. The deal covers 93 million litres of capacity, equivalent to around nine days of national diesel demand, and will remain in place until December 2027. The project is progressing on an accelerated schedule, with operations expected to begin by May 2026. This initiative aims to strengthen fuel supply resilience while generating steady short-term revenue, highlighting the company’s role in supporting New Zealand’s evolving energy infrastructure.

How Will This Project Improve Energy Security?

The additional diesel storage significantly enhances New Zealand’s fuel resilience by increasing buffer capacity during supply disruptions. By adding the equivalent of nine days of diesel demand, the project ensures greater stability in the national fuel supply chain. The rapid deployment highlights the importance of strategic infrastructure in managing uncertainties, particularly amid fluctuating global energy markets and evolving domestic demand conditions.

What Are the Financial and Operational Impacts?

The agreement is expected to generate approximately $1.2 million in monthly revenue, contributing around $8 million in 2026. Despite this, Channel Infrastructure NZ Limited has maintained its FY26 EBITDA guidance of $95–$100 million, citing uncertainty in fuel demand. The project is being funded within existing debt capacity, reflecting efficient capital management and limited additional financial strain.