Conditional sale agreement reached for decommissioned asset

Channel Infrastructure (CHI) announces that, following a comprehensive marketing process it has entered into an Asset Sale Agreement with US-based Seadra Energy Incorporated (SE) pursuant to which SE (or its assignee) has been granted an option to purchase permanently decommissioned parts of the former refinery. Under the agreement, SE will have six-months to consider the purchase of certain assets from the hydrocracking complex in consideration for a non-refundable option payment of US$4 million.

SE may choose not to pursue the purchase, or may renew the option for an additional six months for a further non-refundable payment of US$0.5 million. Should SE elect to exercise the option, subject to meeting certain conditions, the purchase price for the assets agreed between the parties is US$33.875 million (including the option payments, but prior to any transaction costs), with the balance of the purchase price to be paid in instalments throughout the expected 12-month deconstruction period, with the payments secured by a New Zealand bank-issued letter of credit.

Channel Infrastructure CEO, Rob Buchanan says “Should Seadra Energy choose to proceed with the purchase, this agreement provides an opportunity for Channel to free up space on our Marsden Point site from these permanently decommissioned refinery assets, allowing us to consider repurposing and site restoration opportunities, such as the potential manufacture of green hydrogen and eSAF at Marsden Point, which we recently announced will now progress to the next phase with Fortescue Future Industries. These site repurposing opportunities have the potential to contribute to New Zealand’s wider decarbonisation efforts and energy transition, and bring the potential for new jobs for Northlanders.”

Channel will continue to evaluate opportunities in respect of other decommissioned parts of the former refinery which are not included in this agreement with SE. The current net book value after impairments of all decommissioned refinery plant (including the assets proposed to be sold to SE) is c.NZ$29 million, which will be reviewed in light of any agreements relating to the sale of any refinery assets, with a consequential reduction in the refinery demolition provision also yet to be assessed.


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Authorised by
Chris Bougen
General Counsel and Company Secretary

Investor Relations contact:
Anna Bonney
[email protected]

Media contact:
Laura Malcolm
[email protected]
+64 21 02363 297

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Announcement PDF