Channel Infrastructure NZ (ASX:CHI): Another Kiwi company just joined the ASX, but this one is the nation’s largest fuel supplier

Last Friday, Channel Infrastructure NZ listed on the ASX as a dual-listing. It is unlike the bulk of Kiwi companies that have listed on the ASX before it in being capped at over NZ$1bn and specialising in fuel transportation and supply. And while the New Zealand economy is in a bad shape, this has not stopped the company’s shares gaining over 50% this year. Will 2026 be another good year?

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Meet Channel Infrastructure NZ

Channel Infrastructure NZ (listed under the ticker CHI on the NZX) is one of New Zealand’s most critical energy infrastructure businesses. It owns and operates the fuel import terminal and associated assets at Marsden Point which is in the harbour near Whangārei which is north of Auckland. It has a capacity of 290m lietres on site.

It handles about 40% of New Zealand’s transport fuel demand and 80% of the country’s jet fuel supply — including fuel delivered to the Auckland and Northland markets.

The business receives, stores, tests and distributes imported petrol, diesel and jet fuel via deep-water port infrastructure, large tank farms and a 170 km pipeline to Auckland. It also owns Independent Petroleum Laboratories, providing fuel quality testing services.

It has actually been listed since 1962 and was known as Refining NZ, but rebranded in 2022 following its exit from refining (in the closure of New Zealand’s only oil refinery) and its reorientation to infrastructure operations.

2025: The year of its ASX debut, and a 50% NZX gain

Channel has just debuted on the ASX. Now, it was not a traditional IPO, but a Foreign Exempt Dual Listing. Its primary listing remains on the NZX, but the ASX Foreign Exempt status provides access to a larger pool of institutional and retail investors across Australia while not having the red tape of complying with the rules of both exchanges. Of course, there is the chance it may follow Xero in eventually making the ASX its primary listing then delisting, but only time will tell.

But 2025 would have been a good year anyway, all else being equal. Its ASX shares have grown over 50% in the past 12 months. Unlike other Kiwi companies, it uses the calendar year rather than the April-March fiscal year. A total of 3.5 billion litres of fuel was imported throughout the year (up 3%).

Channel Infrastructure’s revenue for 2024 was $139.8m, up 7%, its EBITDA was $95.1m, representing 9% growth and a 68% margin. It paid a dividend of $0.11 per share, up 5% and in line with its dividend policy of paying out 60-70% of normalised feee cash flows. Over 2024–25, Channel secured multiple new long-term storage and infrastructure contracts (including jet fuel and bitumen storage deals) driving incremental revenue over 10–15 year terms.

It guided to $89-94m in EBITDA from continuing operations for CY25. And since the results, it boosted its payout policy to 70-90% and is targeting 12-12.5cps.

Big times ahead

Channel Infrastructure is hoping to expand its site and help the transition to renewable energy. It sees potential to manufacture lower-carbon future fuels (including for aviation) and ‘potential energy security opportunities’. There has been hope that the energy precinct could be a Special Economic Zone which would be a big boost to the project.

Although that prospect is a hypothetical, a reality is the NZ Government increasing minimum diesel stock requirements which positions Channel’s storage assets as essential for national fuel security. And other private companies are collaborating for the cause with Channel Infrastructure.

Last year, it entered a conditional project development agreement with a consortium, which includes Qantas, to develop a biorefinery at Marsden Point. The proposed biorefinery could become an anchor tenant for Channel’s Marsden Point Energy Precinct, producing sustainable aviation fuel (SAF), which aligns with Qantas’ goal for 10% of its fuel usage to come from SAF by 2030.

Channel is hedging its bets, because it won’t be an easy ask

At the same time, there is a reason why Channel Infrastructure is positioning itself for the future. Because fossil fuels are being phased out. Slowly yes, but the transition is on. Don’t get us wrong, the company is well positioned to assist with the transition (we are not suggesting it is not), but it will not be a cheap exercise (whether you judge it by time, money or both).

One peculiar move it made last month is taking a 25% interest in the Somerton Pipeline Joint Venture jet fuel pipeline for A$14.2m. The pipeline is operated by ExxonMobil and is co-owned with Exxon, bp and Viva Energy. You see, Channel Infrastructure is looking to expand its business and this pipeline will be crucial with Melbourne Airport’s projected growth. Its third runway, set to open in the early 2030s will enable a further 136,500 aircraft movements a year by 2046.

Conclusion

Channel Infrastructure is in many respects little different to other big companies like AGL (ASX:AGL) which are navigating the energy transition – balancing the large investments required with the need to maintain cash flows in the mean time and keep its customers (and thus the broader public) happy.

Channel Infrastructure is better than its peers in having a more stable business for now – it is not as if biofuels are a legitimate alternative at this stage. At the same time, there will inevitably be a transition and it remains to be seen how it will be handled.