Conditional sale agreement reached for decommissioned asset

channelnz.com



NZX RELEASE
10 July 2023


Conditional sale agreement reached for decommissioned
assets

Channel Infrastructure (CHI) announces that, following a comprehensive marketing process it has entered
into an Asset Sale Agreement with US-based Seadra Energy Incorporated (SE) pursuant to which SE (or its
assignee) has been granted an option to purchase permanently decommissioned parts of the former refinery.
Under the agreement, SE will have six-months to consider the purchase of certain assets from the
hydrocracking complex in consideration for a non-refundable option payment of US$4 million.

SE may choose not to pursue the purchase, or may renew the option for an additional six months for a further
non-refundable payment of US$0.5 million. Should SE elect to exercise the option, subject to meeting certain
conditions, the purchase price for the assets agreed between the parties is US$33.875 million (including the
option payments, but prior to any transaction costs), with the balance of the purchase price to be paid in
instalments throughout the expected 12-month deconstruction period, with the payments secured by a New
Zealand bank-issued letter of credit.

Channel Infrastructure CEO, Rob Buchanan says “Should Seadra Energy choose to proceed with the
purchase, this agreement provides an opportunity for Channel to free up space on our Marsden Point site
from these permanently decommissioned refinery assets, allowing us to consider repurposing and site
restoration opportunities, such as the potential manufacture of green hydrogen and eSAF at Marsden Point,
which we recently announced will now progress to the next phase with Fortescue Future Industries. These
site repurposing opportunities have the potential to contribute to New Zealand’s wider decarbonisation efforts
and energy transition, and bring the potential for new jobs for Northlanders.”

Channel will continue to evaluate opportunities in respect of other decommissioned parts of the former
refinery which are not included in this agreement with SE. The current net book value after impairments of
all decommissioned refinery plant (including the assets proposed to be sold to SE) is c.NZ$29 million, which
will be reviewed in light of any agreements relating to the sale of any refinery assets, with a consequential
reduction in the refinery demolition provision also yet to be assessed.


- 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

channelnz.com
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, and work
underway with customers and partners on biofuel and hydrogen opportunities.
For more information on Channel Infrastructure, please visit: www.channelnz.com