Channel Infrastructure NZ has secured a new agreement with the government to expand diesel storage capacity at its Marsden Point terminal, enhancing New Zealand’s fuel resilience amid ongoing global supply pressures.
The company will add an additional 93 million litres of storage capacity under contract until 31 December 2027. This represents around nine days of extra diesel supply security.
Storage is being brought into service ahead of schedule and remains on track to meet the current target date for full capacity availability of May 31, it said.
The expansion comes as global fuel markets remain under strain, with disruption in key shipping routes such as the Strait of Hormuz, through which roughly 20% of global crude oil flows, following the conflict involving Iran.
Channel expects the arrangement to generate around $8 million in 2026. However, the company notes ongoing uncertainty in fuel demand given persistently high prices and has maintained its 2026 EBITDA guidance of $95–$100 million.
The upgrade works include cleaning tanks, building pipelines to integrate the tanks into Channel’s diesel infrastructure, and installing instrumentation and pumping systems to enable fuel to move through the supply chain.
Under the agreement, Channel anticipates generating additional revenue of $1.2 million per month from the date the capacity becomes available over the duration of the storage term.
The agreement with the government includes provisions to reimburse Channel for its costs if the government decides not to proceed with the additional storage capacity before the capacity becomes available.
Channel has already begun work to bring the additional storage into service, with its team and contractors working up to seven days a week.
The required work is substantially less extensive than a full tank refurbishment, which would normally take around 18 to 24 months, meaning the costs can be covered within Channel’s existing debt facility.
The Ministry for Business, Innovation and Employment (MBIE) recently reported that fuel supplies remain stable, with stock levels broadly consistent with normal ranges despite global disruptions. Current reserves stand at 56.3 days for petrol, 45.4 days for diesel, and 47 days for jet fuel.
Channel says it will continue monitoring demand conditions and provide further updates at its annual meeting on 6 May.