Channel Infrastructure at Northland’s Marsden Point is now an import fuel terminal. Video / Alyse Wright
Fletcher Building has cut a 15-year contract with Channel Infrastructure to build a new bitumen terminal at its shut-down oil refinery on Northland’s Marsden Point.
The new import terminal, set to be operating from the second half of 2026, would let Fletchers’ civil construction business Higgins bring bitumen directlyinto Northland to use on construction projects in the upper North Island, such as roading projects.
The terminal and related storage and truck loading facilities on site were expected to cost $17 million to $21m to develop, and add $45 million to Channel’s revenue over the 15-year period.
It would cost $200,000 annually to operate.
“This new contract with Higgins grows and further diversifies Channel’s contracted revenue that is not dependent on fuel volume and is another important step in the delivery of Channel’s Marsden Point energy precinct for New Zealand,” Channel chief executive Rob Buchanan said in a market announcement.
Bitumen was a byproduct of the crude oil hydrocarbon refining process that was collected on site at Marsden Point as part of its refining operation since the 1960s. But that process was shut down permanently in 2021.
Before the closure, Marsden Point provided 70% of all bitumen supply in New Zealand, according to NZ Transport Agency Waka Kotahi’s bitumen supply chain review in April 2021.
The new Northland bitumen import and storage terminal added to Fletcher’s bitumen operation at Port of Napier that began last year.
“This long-term bitumen terminal partnership with Channel Infrastructure supports our business strategy to provide critical infrastructure services and products to the New Zealand market and supplements our existing bitumen import terminal at Port of Napier,” Fletcher Construction chief executive Phil Boylen wrote in the announcement.
“Fletcher Construction is well placed to support the Government’s land transport investment agenda including the state highway network and local road maintenance through our integrated delivery platform of bitumen, asphalt manufacture and construction services.”
Fletcher was the first customer to sign a contract with Channel Infrastructure, formerly Refining New Zealand, since the shutdown.
“This is a demonstration of our vision to maximise the value for New Zealand from our highly strategic assets and site, and a way for us to contribute to Northland’s continued growth and development,” Buchanan added.
Northland's Marsden Point oil refinery is now an import-only terminal after refinery operations were shut down in 2021.
“It is pleasing to see our vision for the Marsden Point Energy Precinct start to take shape.
“This announcement is testament to the way we are making significant progress with the nearer-term opportunities to infill our existing site and repurpose and further utilise our existing infrastructure.”
This was the third deal Channel had struck this year as it looked to a future without fuel refining.
It had signed three storage contracts this year with customers for transmix (a mix of petrol-jet fuel-diesel product) and jet fuel.
Channel expected the three contracts to require $55m to $66m of capital investment and return about $120m in revenue over a 15-year period.
Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment and has covered business and economics for television and radio broadcasters.
