CHI

[Glenorchy]

I'm not sure if Mobil oil are still selling down their previous 14.1% shareholding or if that's already finished. There's plenty of sell side liquidity for CHI at present this might also be due to the fact that they've effectively cut their dividend albeit only a small amount but last year they paid 7 cents final (ord + special) + supp and fully imputed but this year though they're paying 7.8 cents final there is no supp and no imputatuion meaning overall holders will bank a little less. Even so they are looking like a decent infrastructure income stock.

[lorraina]

Craigs,Forbar and Jarden rate CHI as "Out Perform"
Forbar stated Mobil Oil NZ had sold out mid December.

[Glenorchy]

Forbar are right there was a SPH Notice to say Mobil now held 0 shares back in December but Jarden Partners bought them all - was it their intention to keep them all after the 72.6 million block agreement or are they now selling them down? I guess we'll see another SPH if they are.

I'm a holder, if they are going to outperform, great, I look forward to seeing that. Since they announced their pretty decent result and div their share price has fallen but I'm in long so not too worried about little ups and downs.

[winner (n)]

Forbar are right there was a SPH Notice to say Mobil now held 0 shares back in December but Jarden Partners bought them all - was it their intention to keep them all after the 72.6 million block agreement or are they now selling them down? I guess we'll see another SPH if they are.

I'm a holder, if they are going to outperform, great, I look forward to seeing that. Since they announced their pretty decent result and div their share price has fallen but I'm in long so not too worried about little ups and downs.

Mention of outperform reminded me a paper about the triumph of mediocrity in investing

[lorraina]

I liked this announcement so much I added to my holding.;
Biorefinery proposed at Marsden Point Energy Precinct
Channel Infrastructure NZ Limited (NZX:CHI) announces it has entered into a conditional project
development agreement with Seadra Energy Inc, who is partnering with consortium members Qantas,
Renova Inc, Kent Plc, and ANZ (the "Seadra Consortium"), to develop a biorefinery at Channel's Marsden
Point site. Should the project proceed, the proposed biorefinery could become an anchor tenant for
Channel's Marsden Point Energy Precinct.
On 10 July 2023, Channel announced it had entered into an option agreement with Seadra to purchase
certain decommissioned assets from the hydrocracking complex for US$33.875 million. That option
agreement was due to expire on 30 September 2024, and to date Channel has received US$4.7 million in
non-refundable option payments.
Seadra has informed Channel that following many months of investigation of project alternatives by the
Seadra Consortium, including alternatives that involved the complexity and cost of deconstructing and
moving assets offshore, the Seadra Consortium now considers that leaving the assets at Marsden Point and
utilising them in-situ for a proposed biorefinery is their preferred project option.
Should the project development agreement being announced today become unconditional, it is anticipated
that the proposed biorefinery project at Marsden Point would utilise some of Channel's decommissioned
refinery assets (which would be refurbished and reconfigured), existing tankage, jetties and certain other
infrastructure, as well as approximately 18-20 hectares of land on the site.
In addition, the proposed biorefinery project has been located on the Marsden Point site such that it would
not impact on the proposed footprint for the previously announced proposed e-Sustainable Aviation Fuel
project at our site.
Commenting, Channel Infrastructure CEO Rob Buchanan said:
"Attracting another potential international future fuels project to Marsden Point is further validation of the
unique nature of our strategic site. While there can be no guarantee that these projects will ultimately
proceed, the fact that we have been able to attract two potential projects of this calibre is testament to the
attractiveness of our Marsden Point site for the production of lower-carbon fuels and the inherent value of
our land. Should the Marsden Point biorefinery project proceed, it would create value for shareholders
through the sale of decommissioned assets and revenue from long-term contracts for the use of our land,
and other infrastructure, by the biorefinery. The proposed biorefinery project is just one example of the many
and varied opportunities we see to develop Marsden Point as an energy precinct for New Zealand over the
long term."
Under the new project development agreement, Channel and Seadra will work together to progress the
project to a final investment decision, anticipated by the second half of 2025. If the proposed biorefinery
project proceeds, several key commercial elements have already been agreed in principle, including:
• Channel would sell to Seadra the hydrocracking assets that are the subject of the option agreement
announced on 10 July 2023 for US$33.875m (less the US$4.7m option payments already received;
channelnz.com
• Channel would sell additional decommissioned refinery assets to Seadra for c.US$23m (subject to
satisfactory completion of engineering studies in respect of those assets);
• Channel would lease to Seadra approximately 18-20 hectares of land at Marsden Point for a total
annual rent payment of approximately NZ$6 - 7 million per annum (subject to periodic adjustment)
over 25 years;
• Channel would make available additional tankage, jetty facilities and certain other infrastructure at
Marsden Point for annual fees to be agreed between the parties; and
• The Seadra Consortium would be responsible for the ownership, construction, and operation of the
biorefinery.
The final investment decision to proceed with the Marsden Point biorefinery project will be subject to entry
into final form binding agreements in relation to the above, and completion of a debt raising advised by ANZ.
Channel Infrastructure CEO Rob Buchanan said:
"Channel Infrastructure has considered several options to dispose of the decommissioned hydrocracking
assets and other unused assets on its site. Having undertaken a global sale process for the
decommissioned assets over more than two years, and recognising that disassembling and shipping these
assets offshore creates considerable complexity for prospective purchasers, we are confident that the
proposed Marsden Point biorefinery project provides the best opportunity for Channel to realise proceeds
from this sale process at this time."
Seadra commented:
"After more than 24 months of detailed engineering and other workstreams, the project consortium partners
have selected New Zealand as the best place for the biorefinery project site. Given the world class
infrastructure available at Channel's facilities, and having identified multiple markets for the biofuels
produced, the economics for a domestic advanced biorefinery made the most sense for the consortium."
Qantas added:
"Sustainable aviation fuel will be critical to decarbonising the aviation industry. Qantas has set a 10% SAF
target for 2030 and is investing in the development of SAF production through its $400m climate fund. This
includes early investment in the development of the biorefinery at Marsden Point. New Zealand and the
Pacific are a key part of our network and we've recently announced an increase in our trans-Tasman
services by up to 50% from October 2024."
Renova added:
"As a renewable energy developer and owner-operator, Renova is committed to reducing GHG emissions
from the energy sector, which accounts for 1/3 of global emissions. While continuing to expand our
renewable portfolio, Renova is also exploring other solutions to address the remaining 2/3, and we believe
biofuel is a promising option. The biorefinery at Marsden Point, once realised, will be a significant step in this
effort, and we are excited about the potential of this project."
Seadra's existing option to purchase certain decommissioned assets from the hydrocracking complex will be
extended to enable Seadra to progress and finalise its investigation into the Marsden Point biorefinery
project, and will remain exercisable by Seadra by 31 July 2025 should it ultimately decide to not proceed with
the Marsden Point biorefinery project.
Channel will release more detail on 24 October 2024 about the company's vision for developing Marsden
Point as an Energy Precinct, and how it can accommodate a range of energy project opportunities on its
unique Marsden Point site.
- ENDS -
channelnz.com
Authorised by:
Chris Bougen
General Counsel and Company Secretary