Q4 Conversion Project Update

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NZX RELEASE

16 January 2023

Q4 Conversion Project Update
Channel Infrastructure (CHI), New Zealand’s largest fuel import terminal business based at Marsden Point in
Northland, has today released its quarterly conversion project update for the three months ended 31
December 2022 (Q4 FY22).

Key conversion project highlights for Q4 FY22 include:
• Nine months of terminal operations successfully completed with 56 import shipments received and
discharged;
• Permanent decommissioning of refinery process plant is now nearing completion and on track to be
completed in H1 FY23;
• Almost half of the private storage capacity has been commissioned and is now available at Marsden
Point; and
• Conversion costs continuing to track to budget, with c$126 million
1
spent project to date and limited
utilisation of project contingency to date.

CEO Naomi James said “The importance of our critical infrastructure has never been clearer, as aviation
demand rapidly returns to New Zealand. We have successfully completed tank conversions on almost half of
the contracted private storage capacity, with the remainder due to come online in coming months.”

After nine months of terminal operations, with imported fuel flowing through our infrastructure and the first
delivery of sustainable aviation fuel receipted into Marsden Point, our business is now firmly focused on
delivering our plans for the future. We are working with the New Zealand Government to support their fuel
security measures and progressing work to source more affordable and preferably renewable electricity, with
significant interest received in response to our RFI.”

Terminal and pipeline throughput in Q4 2022 was 800 million litres, the highest level seen since the arrival of
COVID. Aviation demand continues to show a strong recovery, with jet consumption (which is predominantly
driven by the resumption of long-haul flights out of Auckland Airport) now having doubled compared with the
same period last year and reaching 65% of pre-COVID levels.

Rigorous testing processes at Marsden Point identified an off-specification jet import cargo in December and
ensured this fuel was not distributed further along the supply chain. We are now working with our fuel
company customers, who own the fuel imported into Marsden Point, to draw learnings from this incident. We
expect that the Government’s proposed minimum domestic stockholding obligations will support additional
system resilience, when implemented.

Decommissioning of refining plant is nearing completion and remains on track to be completed in H1 2023.
The terminal upgrade works, and continued private storage tank conversion works, are ongoing and
progressing well with almost half of contracted private storage capacity commissioned in 2022. A further
c.50 million litres of mostly jet private storage is due to be commissioned mid-2023. Schedule impacts from

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supply chain disruptions and abnormal levels of wet weather in Northland are being closely managed, with
November the wettest month on record.

Conversion costs are tracking to plan with c.$126 million
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spent to 31 December 2022 (30 September 2022:
$98 million), including c$15 million of private storage costs (30 September 2022: $7 million). In addition,
platinum leases of $14 million were closed out in the quarter, with recovery of platinum from catalyst
expected to occur within 12-24 months. Conversion costs and platinum lease close-out, partly offset with
positive cash flows from terminal operations, resulted in an increase in net borrowings from $230 million as
at 30 September 2022 to $257 million as at 31 December 2022.

- ENDS -

Authorised by:
Chris Bougen
General Counsel and Company Secretary
Investor Relations contact:
Anna Bonney
investorrelations@channelnz.com

Media contact:
Laura Malcolm
communications@channelnz.com
+64 21 02363 297

About Channel Infrastructure NZ
Channel Infrastructure is New Zealand’s leading fuel infrastructure company.
Channel Infrastructure owns critical infrastructure, supplying the Northland and Auckland markets, which
make up 40% of New Zealand’s transport fuel demand and all of the jet fuel to the Auckland International
Airport. Utilising the deep-water harbour and jetty infrastructure at Marsden Point, as well as 280 million
litres of storage tanks, and the 170-kilometre pipeline from Marsden Point to Auckland we receive, store, test
and distribute fuel owned by our customers. Channel Infrastructure’s wholly-owned subsidiary, Independent
Petroleum Laboratory Limited, provides fuel quality testing services at Marsden Point and around New
Zealand.
Channel Infrastructure is well positioned to support New Zealand’s changing future fuel needs, with growth
opportunities at the Marsden Point site including additional fuel storage to support fuel security, renewable
electricity supply through the Maranga Ra solar project, and work underway with customers and partners on
biofuel and hydrogen opportunities.
For more information on Channel Infrastructure, please visit: www.channelnz.com



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Subject to the finalisation of the FY22 financial results.