Latest / The SME Stream / Jeremy Hutton: Milford Asset Management Equities Analyst on the biorefinery to be built at Marsden Point

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Jeremy Hutton: Milford Asset Management Equities Analyst on the biorefinery to be built at Marsden Point · The SME Stream

• 0:00
  Speaker 1: Twenty three past six on News Talk SEDB before seven o'clock,
• 0:02
  Speaker 1: we will tell you about the government's new push to
• 0:04
  Speaker 1: get councils to do more building inspections remotely but in
• 0:09
  Speaker 1: renewable fuels. News Channel Infrastructure has announced a potential biorefinery
• 0:15
  Speaker 1: at Marsden Point. Jeremy Hutton from Milford Asset Management as
• 0:18
  Speaker 1: with US Nawagaday Jeremy, Hi, Jack, Yeah, talk to us
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  Speaker 1: about this.
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  Speaker 2: Yeah. Channel Infrastructure, which is now a fuel importer and
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  Speaker 2: fuel storage provider based at the old New Zealand refinery site,
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  Speaker 2: announced this biorefinery project yesterday. So a consortium of international
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  Speaker 2: companies are looking at developing this site and they're looking
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  Speaker 2: to produce some sustainable aviation fuel for Australian airline contests.
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  Speaker 2: There are a few others in the consortium, Renover and
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  Speaker 2: Kent Energy. They're both experts and building renewable fuel projects
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  Speaker 2: around the world, and an z is likely involved to
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  Speaker 2: produce the finance as well. But effectively, what they're trying
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  Speaker 2: to do is utilize some of the old decommissioned refinery
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  Speaker 2: assets and produce sustainable aviation fuel, which is very exciting
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  Speaker 2: and quite a good use of the old tet but
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  Speaker 2: there are still a few unknowns like whether the biofuel
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  Speaker 2: be used locally or if Concerts will want to ship
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  Speaker 2: it back to Australia. But investors really like this announcement
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  Speaker 2: and they sent the share price up almost ten percent yesterday.
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  Speaker 1: Yeah, it's amazing. So how does Channel bring in revenue
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  Speaker 1: from this? How does the process if you work?
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  Speaker 2: Yeah? So remember Channel is an infrastructure provider now only,
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  Speaker 2: and the revenue it earns from this and other projects
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  Speaker 2: are quite similar effectively renting out their storage units, companies
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  Speaker 2: using their land for rents and the use of their
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  Speaker 2: pipeline and their jetty as well. And this creates a
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  Speaker 2: really steady and predictable revenue stream which certain investors will
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  Speaker 2: really really like. But there is an upside for Channel
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  Speaker 2: when this project displays it. They've got a lot of
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  Speaker 2: land and a lot of that's consented, which, let's face it,
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  Speaker 2: is very important these days. They've got consent to evictively
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  Speaker 2: expand more future energy and more future fuels on the
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  Speaker 2: site and they're calling it the MARSS and Energy Precinct.
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  Speaker 2: Now for the local communities, this is really good news
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  Speaker 2: as well. There's potentially a lot a lot more local
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  Speaker 2: manufacturing and heavy industry's jobs returning and almost a reindustrialization
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  Speaker 2: coming back to New Zealand with a linkage to more
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  Speaker 2: sustainable fuels as it.
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  Speaker 1: What's next to the project and the Channel infrastructure.
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  Speaker 2: Yeah, I note that the project is still conditional, but
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  Speaker 2: it's gone a long way. But they're still financing to
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  Speaker 2: organize and they're aiming to push go on this construction
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  Speaker 2: in the second half of next year. The Channel's also
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  Speaker 2: got some further plans afoot. They've got to an invest
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  Speaker 2: today lined up later this month which will dealve into
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  Speaker 2: this energy precinct a bit more. But from this news,
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  Speaker 2: I think it's clear that international companies that are focused
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  Speaker 2: on this area globally of renewable fuels are very attracted
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  Speaker 2: to the Mars and Point site. You've got Ossi Energy, Giant,
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  Speaker 2: Fortished View also looking hard. But with the quantists and
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  Speaker 2: the sustainable aviation fuel projects, the future is potentially very
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  Speaker 2: promising up here.
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  Speaker 1: Any idea, Jeremy, when they might actually be producing this
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  Speaker 1: sustainable fuel or this biofuel.
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  Speaker 2: Yeah, hopefully pretty soon. They're doing a lot of testing,
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  Speaker 2: still in a lot of internal work with this consortium,
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  Speaker 2: but yeah, construction starting second half of next year, and
• 3:27
  Speaker 2: hopefully not too long after that they're producing.
• 3:29
  Speaker 1: Yeah. No, very good. Hey, thanks, Jeremy, appreciate it.