Rising Borrowings and Project Timelines Pose Questions for Channel’s Next Phase
Channel Infrastructure has reported a 3.9% increase in fuel throughput for Q4 2025, marking its highest quarterly volume since import terminal operations began. Key infrastructure projects are progressing ahead of schedule, positioning the company strongly for future growth.
- Q4 2025 fuel throughput up 3.9% to 945 million litres, highest since 2022 start
- Jet fuel throughput strongest since Q1 2019 despite Air New Zealand aircraft issues
- Z Energy jet storage conversion project ahead of schedule for H2 2026 delivery
- Bitumen import terminal and additional storage projects on track for 2026 and beyond
- Net borrowings rose to $330 million, conversion spend remains within budget
Robust Throughput Growth
Channel Infrastructure NZ Limited has delivered a solid operational performance in the final quarter of 2025, with total fuel throughput rising 3.9% year-on-year to 945 million litres. This marks the highest quarterly throughput since the company commenced import terminal operations in April 2022, underscoring its growing role in New Zealand's fuel supply chain.
Jet fuel volumes were particularly notable, reaching their strongest quarterly level since early 2019. This is despite well-publicised aircraft availability challenges faced by Air New Zealand, which tempered full-year jet fuel demand. Meanwhile, petrol and diesel throughput combined also showed growth, aligning closely with industry forecasts from Envisory.
Strategic Infrastructure Projects Progressing
Channel’s key growth initiatives are advancing well. The Z Energy jet storage tank conversion is ahead of schedule and remains within budget, now expected to complete in the second half of 2026 rather than early 2027. This accelerated timeline could enhance Channel’s capacity to meet jet fuel demand sooner than anticipated.
Additionally, the bitumen import terminal construction is on track for delivery in the latter half of 2026, while a contract for additional storage capacity, set to generate $50 million in revenue over nine years, is progressing as planned, with operations slated to commence in early 2028.
Financial Position and Outlook
Net borrowings increased modestly to $330 million by the end of December 2025, reflecting ongoing investment in conversion projects. Total conversion expenditure reached approximately $196 million, remaining comfortably within budget. The company’s bund upgrade program, critical for environmental compliance and operational resilience, continues steadily with final phases extending into 2027.
Channel Infrastructure’s strategic location at Marsden Point and its extensive storage and pipeline network underpin its pivotal role in New Zealand’s fuel supply. The company is also positioning itself to support the country’s energy transition ambitions, exploring opportunities in lower-carbon fuels and energy security initiatives within the Marsden Point Energy Precinct Concept.
Overall, Channel’s operational update signals a company on a steady growth trajectory, balancing robust throughput volumes with disciplined capital investment and a clear eye on future energy trends.
Bottom Line?
Channel Infrastructure’s strong throughput growth and accelerated project timelines set the stage for sustained market relevance amid New Zealand’s evolving energy landscape.
Questions in the middle?
- How will increased throughput translate into revenue and profit growth in upcoming financial reports?
- What risks could delay the completion or impact the returns of the jet storage and bitumen terminal projects?
- How aggressively will Channel pursue opportunities in renewable and lower-carbon fuel infrastructure?
