NZ Fast-Tracks Diesel Storage Expansion at Marsden Point to Boost Fuel Security

In a decisive move to bolster national energy security amid escalating global supply risks, the New Zealand Government has approved up to $21.6 million in funding to rapidly expand diesel storage capacity at Marsden Point, Northland—adding an additional 90 million litres of critical fuel reserves.

The investment, drawn from the Regional Infrastructure Fund (RIF), will enable Channel Infrastructure NZ Ltd to recommission dormant storage tanks at the former refinery site, significantly enhancing the country's ability to withstand disruptions linked to the ongoing Middle East conflict.

Strategic Response to Global Fuel Volatility

Regional Development and Associate Energy Minister Shane Jones said the move reflects growing urgency as geopolitical tensions continue to destabilise global fuel supply chains.

"Diesel is the lifeblood of our economy," Mr Jones stated. "From freight and agriculture to construction and emergency services, New Zealand depends heavily on reliable diesel access. Strengthening storage capacity ensures we are better prepared for supply shocks."

New Zealand currently relies heavily on imported refined fuels, making storage capacity a critical vulnerability in times of international disruption. The Government has indicated that while current diesel supplies are secure until the end of May, uncertainties beyond that window require immediate contingency planning.

Project Details: Rapid Deployment at Scale

• Storage Capacity Added: 90 million litres

• Estimated Coverage: Approximately 8 days of national diesel demand

• Project Timeline: Expected completion within two months

• Operator: Channel Infrastructure NZ Ltd

• Funding Source: Regional Infrastructure Fund (reallocated from dormant projects)

Channel Infrastructure has committed to delivering the project within an accelerated timeframe, with refurbishment work on storage tanks expected to begin within days.

"This is an ambitious but achievable project," Mr Jones said. "We are moving quickly to ensure New Zealand has the capacity to store additional diesel if supply opportunities arise."

Why Diesel Matters More Than Ever

Unlike petrol or jet fuel, diesel underpins core economic activity in New Zealand:

• Freight transport: Over 90% of goods are moved by diesel-powered trucks

• Primary industries: Agriculture, forestry, and fisheries rely heavily on diesel machinery

• Construction sector: Diesel fuels heavy equipment and infrastructure projects

• Emergency services: Critical response vehicles depend on uninterrupted diesel access

Any disruption in diesel supply could have cascading effects across the economy, potentially impacting supply chains, food distribution, and essential services.

Reviving Idle Infrastructure

A key element of the plan involves reactivating infrastructure at Marsden Point that has remained underutilized since the refinery ceased operations.

"Large-scale fuel storage has been a longstanding challenge," Mr Jones noted. "Much of our existing capacity has been sitting idle. This initiative brings that infrastructure back into active service at a crucial time."

The Marsden Point site remains New Zealand's most strategically important fuel import and storage hub, handling a significant share of the country's refined fuel imports.

Economic and National Security Implications

The move signals a broader shift toward resilience-focused infrastructure investment, as governments worldwide respond to increasingly volatile energy markets.

Key expected outcomes include:

• Enhanced supply security during global disruptions

• Greater flexibility to purchase and store fuel opportunistically

• Reduced risk of short-term shortages or rationing

• Strengthened national preparedness for emergencies

The Government will closely monitor project progress to ensure the storage capacity becomes operational as quickly as possible.

A Proactive Infrastructure Play

The funding has been reallocated from RIF projects that had been approved in principle but were unlikely to proceed, allowing for rapid deployment without additional fiscal burden.

"This is about being proactive, not reactive," Mr Jones said. "If global supply tightens further, we need to be ready—not scrambling."

As geopolitical tensions continue to influence energy markets, the Marsden Point expansion represents a critical step in safeguarding New Zealand's fuel resilience and economic stability.