CHI - Q1 2023 Conversion Project Update

Thursday 13th April 2023

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 March 2023 (Q1 2023).

Key conversion project highlights for Q1 2023 include:

• Permanent decommissioning of refinery process plant is now in the final stages and will be completed in Q2 2023;

• 55 million litres of private storage capacity has been commissioned and is now available at Marsden Point with the remaining capacity expected to be commissioned during Q3 2023; and

• Conversion costs continuing to track to budget, with c.$145 million spent on the project and limited utilisation of project contingency to date.

CEO Rob Buchanan said “Having now taken over as CEO, I have been extremely impressed by progress made on the conversion project, which is setting the Company up well for the opportunities we have ahead of us. New Zealand has been hit by some extreme weather in this quarter, but our critical infrastructure has proven resilient, with limited impact to conversion activities from Cyclone Gabrielle. While there have been some schedule impacts due to recent severe weather events, critical work continues at pace to complete the contracted private storage capacity, helping our customers build greater resilience into the transport fuels supply chain.”

Terminal and pipeline throughputs remain strong with 810 million litres in Q1 2023 (compared to approximately 800 million litres in the previous quarter) and continues to be driven by aviation demand recovery.

The Company is now in the final stages of the permanent decommissioning of refining plant which will be completed in Q2 2023. As part of the decommissioning and the consequential reduction in the electricity load at the Marsden Point site, updated and lower transmission costs from 1 April 2023 have now been confirmed and are in line with assumptions factored into Channel’s earlier 2023 cost guidance. The terminal upgrade works, and private storage tank conversion works, are ongoing and progressing well with over half of contracted private storage capacity now commissioned and a further c.45 million litres of jet private storage is expected to be commissioned during Q3 of 2023.

Conversion costs are tracking to plan with c.$145 million spent to 31 March 2023 (31 December 2022: $126 million), including c.$21 million of private storage costs (31 December 2022: $15 million). Net borrowings increased to $286 million as at 31 March 2023 (31 December 2022: $257 million).

- ENDS -

Q1 2023 Conversion Project Update

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