Channel Infrastructure has lifted its earnings outlook as new fuel-storage capacity at the former Marsden Point refinery begins generating revenue. A new 15-year agreement with BP is expected to produce around $130 million in revenue, while government diesel storage and other projects further expand the site's role in New Zealand's fuel-security network
eLocal Report: Based on reporting by RNZ HERE.
Channel Infrastructure is beginning to see the financial results of its transformation of the former Marsden Point oil refinery, with additional fuel-storage contracts lifting revenue, profit, dividends and the company's full-year earnings outlook.
For the six months to 30 June 2026, Channel reported revenue of $72.9 million, up from $70.2 million a year earlier.
Net profit after tax increased substantially, from $11.6 million to $18.2 million, while operating earnings from continuing operations were broadly steady at $48.8 million compared with $48.5 million.
The company has now upgraded its full-year EBITDA guidance to $103 million-$108 million, compared with the $97 million-$105 million range provided in May.
Shareholders will also receive a larger interim dividend of 7.25 cents per share, up from 6.25 cents.
But behind those financial numbers is a bigger story about what Marsden Point is becoming after New Zealand stopped refining crude oil there in 2022.
From Oil Refinery to Strategic Storage Hub
The Marsden Point refinery once converted imported crude oil into petrol, diesel and aviation fuel.
Following its closure as a refinery, the site was converted into an import terminal, with finished fuels brought into New Zealand by tanker and stored at Marsden Point before distribution.
Channel has increasingly been using the enormous storage and infrastructure footprint left behind by the refinery for new long-term contracts.
During the latest six-month period, the company brought an additional 123 million litres of jet-fuel and diesel storage capacity into service.
That represents an increase of approximately 40 percent in the storage capacity currently in service at Marsden Point.
One particularly significant project involved 93 million litres of diesel storage for the New Zealand Government.
Channel says that project was delivered in nine weeks.
The company's chair, James Miller, said the latest result demonstrated Channel's ability to turn new infrastructure projects into contracted long-term earnings.
“We have upgraded FY26 EBITDA guidance for the second time this year, increased the interim dividend by a significant 16 percent, and delivered significant contracted growth that will contribute to earnings through the second half of 2026 and into 2027,” Miller said.
BP Signs 15-Year Storage Agreement
Channel has now added another major customer.
The company announced a new 15-year agreement with BP covering additional jet-fuel and diesel storage at Marsden Point.
The contract is expected to generate approximately $130 million of revenue during its first 15 years, before inflation-linked increases.
Revenue is expected to begin flowing from the agreement in late 2028.
Getting there will require additional investment.
Channel expects to spend between $65 million and $70 million from 2026 to 2028 converting existing tanks and associated infrastructure for the BP contract.
The work will be financed through the company's existing debt facilities.
The arrangement illustrates one of Channel's principal advantages at Marsden Point: much of the underlying infrastructure already exists.
Rather than developing an entirely new fuel terminal from scratch, the company can repurpose tanks, pipelines, marine facilities and other infrastructure inherited from the refinery operation.
Energy Security Becomes a Business Opportunity
Chief executive Rob Buchanan said growing attention to energy security was creating further opportunities to use the infrastructure Channel already owns.
That is an important point.
Since the refinery closed, debate around Marsden Point has frequently centred on whether New Zealand surrendered too much domestic fuel resilience when it moved entirely to imported refined petroleum products.
Channel's expanding storage business addresses one component of that problem: how much finished fuel New Zealand can physically hold inside the country.
It does not restore domestic refining capability.
A storage terminal can hold imported diesel, petrol and aviation fuel, but it cannot turn crude oil into usable fuel if international supplies of refined products are disrupted.
Those are two different forms of energy resilience and should not be confused.
Nevertheless, additional domestic storage can increase the buffer available when international shipping or supply chains are disrupted.
The Government's decision to contract 93 million litres of additional diesel capacity demonstrates that storage itself is now being treated as part of New Zealand's fuel-security infrastructure.
Government Storage Worth About $14 Million a Year
The new contracts are expected to become increasingly important to Channel's earnings.
The Government diesel-storage agreement is expected to contribute approximately $14 million to FY27 EBITDA.
Meanwhile, full-year contributions from Z Energy jet-fuel storage and a Higgins bitumen import terminal are expected to add around $9 million to FY27 EBITDA.
These arrangements are attractive to an infrastructure company because they can provide relatively predictable contracted revenue over long periods.
The BP deal follows the same model.
Instead of Channel relying primarily on the volume of fuel moving through the terminal, more of its income can come from customers paying for dedicated infrastructure and storage capacity.
That potentially creates a more diversified business around the former refinery site.
The Marsden Point Question Has Changed
Marsden Point has occupied an unusual place in New Zealand's energy debate since refining ended there in 2022.
Initially, the argument centred on whether closing the refinery was sensible.
That question has not disappeared.
But Channel's latest results demonstrate that a second question is becoming increasingly important:
What should New Zealand do with the strategic industrial infrastructure that remains at Marsden Point?
The site has deep-water access, extensive fuel tanks, pipelines and substantial industrial land.
Channel is demonstrating that some of those assets can be repurposed rather than abandoned.
Government diesel reserves, commercial jet-fuel storage, bitumen imports and the forthcoming BP facilities all use parts of that inherited infrastructure.
That gives Marsden Point an ongoing role in New Zealand's energy system even though crude-oil refining has ceased.
Biorefinery Decision Slips
One potential next stage in the site's transformation is taking longer than expected.
A final investment decision on the proposed Marsden Point Biorefinery is now likely to move into 2027.
Channel said the consortium behind the proposal is taking longer than expected to raise the required equity.
The source material does not establish that the project has been abandoned. Rather, the investment decision has been delayed.
If eventually developed, a biorefinery would add another dimension to Marsden Point's post-refining future.
For now, however, Channel's most tangible growth is coming from the much more conventional business of storing fuel.
Does This Affect New Zealand?
Directly — and for reasons extending beyond Channel Infrastructure's shareholders.
New Zealand is now dependent on imported refined fuels. That makes the infrastructure used to receive, store and distribute those fuels strategically important.
The additional 123 million litres of storage brought into service, including 93 million litres contracted for government diesel reserves, increases the amount of fuel that can physically be held at Marsden Point.
The BP agreement indicates private fuel companies also see long-term value in expanding storage there.
But greater storage should not be presented as equivalent to restoring the refinery.
Storage improves resilience by creating a larger domestic buffer. Refining capability addresses a different risk by providing the ability to process suitable crude oil domestically.
The distinction matters whenever New Zealand assesses its vulnerability to international disruption.
There is also an economic question worth watching.
Channel's strategy is increasingly built around long-term contracted infrastructure. If the company can continue converting otherwise underused refinery assets into productive storage, logistics and energy projects, Marsden Point may retain considerably more strategic value than simply functioning as an import terminal.
The measurable indicators will be straightforward: additional litres of domestic storage, the duration and value of new contracts, the resulting earnings, and ultimately whether those investments materially improve New Zealand's ability to withstand fuel-supply disruptions.
Channel's latest numbers show the commercial transformation is gaining momentum.
The national-interest question is whether that commercial success can also translate into greater energy resilience for New Zealand.
Source
RNZ — Business
Channel Infrastructure lifts outlook, links new BP storage deal
Independent reporting. Original context. Credited sources.