In April 2020, following the commencement of Naomi as our new CEO, the board initiated a strategic review to determine the optimal business model and capital structure. The strategic review looked at a broad range of options, from opportunities to improve the competitiveness of refining operations through to the option of converting to a fuel import business model. From the beginning, the board's priority was to realize full value for the company's assets and deliver more sustainable returns through the cycle. After below cost of capital returns from refinery operations over the previous 10 years, we committed to support our workforce and the wider community through what would be a significant change to our operations. At the same time, we maintained our commitment to continue to support the delivery of secure, competitive fuel to New Zealand.
The simplification of refinery operations at the start of 2021 created time to negotiate new agreements with customers which were fair for our shareholders and gave us time to prepare for a planned transition. Over the past year, the board and leadership team have worked extremely hard to deliver on the agreed way forward for our business, which was of course the conversion to the import terminal model. This involved securing the necessary lender, shareholder and customer approvals and agreements, undertaking detailed planning to enable our change, and working closely with stakeholders to prepare for a planned transition to mitigate the impacts of these changes on our people and community. After significant planning and preparations, we have this year been able to safely shut down the refinery and commence terminal operations as we relaunch as Channel Infrastructure, a company that now has a strong base for long-term sustainable operations.
The strategic review and decision to convert our operations has involved very significant change in our business and for our people. I want to pay tribute to the way that the whole team have stepped up to this challenge and the professionalism and dedication they have shown every single day, both to keeping themselves and each other safe through this period of change and maintaining secure fuel supply for New Zealand. With the change to Channel Infrastructure, which successfully took place on 1 April. We have fundamentally reset what we do and the financial and risk profile of our business. This reset was necessary to establish a sustainable business that has a strong role to play in New Zealand's fuel supply chain long into the future.
Our customer contracts with their fixed fee and take-or-pay protection, together with lower operating costs, means we can expect significantly lower earnings volatility. Less complex and hazardous operations means Channel Infrastructure has lower operational risk and significantly reduced ongoing maintenance CapEx requirements. Last but certainly not least, we have reduced the company's exposure to the high costs of electricity, eliminated our need for natural gas, and significantly cut our carbon emissions, delivering a measurable impact on New Zealand's wider climate ambitions. Together, these measures deliver a long-term sustainable operating model, allowing us to focus on de-leveraging to 3x-4 x net debt to EBITDA, supporting a return to dividends for you, and to start moving forward with a focused growth strategy for the future. The Channel Infrastructure team has a clear direction and a path to get us there.
Shareholders, our vision is to be New Zealand's leading fuel infrastructure company. We are passionate about keeping New Zealand moving today. As our energy needs as a nation change, we are ready to meet the needs of tomorrow's fuel and energy markets. To get there, we have a strong plan to leverage our existing capabilities through the delivery of safe, reliable, low-cost operations and by embedding the high-performance culture that we are so very proud of. As a business, we will transform to deliver value by operating with competitive cost of capital while realizing the real value of our infrastructure. We are positioning for future growth. We are committed to using Channel Infrastructure's highly strategic assets and transport energy infrastructure to support New Zealand in meeting its fuel needs now and in the future as those needs change and develop.
With the fundamental reset of the business model, it was appropriate that the board undertook a review of existing corporate governance structures to ensure that they are both consistent with best practice and appropriate for Channel Infrastructure moving forward. The Channel Infrastructure board recognizes the importance of fit-for-purpose corporate governance practices and processes. This includes board composition to provide accountability to shareholders for the company's actions and performance, to strengthen our business culture, and to strive to continuously improve our performance and deliver returns for shareholders. With the transition to Channel Infrastructure and an import terminal business, we recognized the need for a different skill set on the board going forward. Therefore, the board has commenced a refresh, appointing two new directors with skills and experience aligned with the business operations and strategic direction of the company and further increasing the diversity on the board.
With her background in chemical engineering and investment management, Anna Molloy brings a combined skill set that is well suited for Channel Infrastructure. Andy Holmes brings deep understanding of terminal businesses, regional fuel supply chains, and the fuel sector, which will be particularly valuable. Anna and Andy's continued roles as directors will be voted on by shareholders later in this meeting, and the board strongly recommends shareholders vote in favor of the election of Anna and Andy. John Bourke, who brought particular refining expertise to the board, stands down from the board at this meeting. On behalf of the board, I thank John for the insights and experience he brought to Refining New Zealand Board as the company shut down its refining operations and converted to the import terminal.
The board refresh is being undertaken as a staged transition, and throughout, we will continue to maintain a strong independent board, with six of the eight directors being independent directors. Assuming shareholders approve the election of those directors being voted on today, we will also cease the historical practice of inviting nominations from the three customer shareholders of candidates for appointment as directors. In addition, we have today published a new corporate governance statement, which includes changes to our board subcommittee structure to support the board in its oversight of financial and non-financial risks, with climate change and ESG matters enhanced in a new board charter. With the corporate governance review now complete and changes being implemented, it is a natural time for new board leadership, and so I will step down from the board later this year.
I'm delighted to announce that James Miller will take over from me as Chairman of the Board at that time. With James' extensive experience in capital markets, downstream energy sector, and governance positions within leading NZX-listed companies, I have no doubt that I'm passing the baton to the right person. With that, I will hand you over to our Chief Executive, Naomi James.
On behalf of the staff at Marsden Point, I want to thank you for your leadership of the board over the last seven years. In particular, I thank you for your support and guidance for me over the past two years through a period of significant challenge and change for our company. Good afternoon, everyone, and welcome to Channel Infrastructure's 2022 annual shareholders meeting. It's great that so many of you could join us online. We appreciate the engagement of a large number of shareholders despite the change this year to a virtual meeting, and I look forward to seeing you all in person when we return to the hybrid format next year. Since we last met, a lot has changed for our business, and I'm proud to say that we achieved all of our key priorities in 2021. Our personal safety performance was excellent.
We successfully implemented the simplified refinery model from the start of the year, which allowed us to operate cash neutral at the fee floor in an ongoing environment of low refining margins. This created time for negotiation of new agreements with customers and in preparation for a well-planned transition to terminal operations. As Simon mentioned, during this time, we concluded our import terminal services agreement negotiations with all three of our customers, as well as successfully concluding other elements of our strategic review process, including obtaining the approval of our lenders and shareholders with 99% voting in favor of the conversion. This enabled the board to take a final investment decision in November last year to shift to import terminal operations from April this year.
In summary, we operated the refinery safely and to plan, reported a disciplined financial result in a challenging business environment, and delivered a long-term plan to unlock the value of our strategic infrastructure assets for shareholders. None of this could have been achieved without the superb team at Marsden Point, who have maintained their commitment to operating safely and delivering to plan throughout the past two years despite the uncertainty and change created by the strategic review process and the ever-changing impact of COVID-19 on our day-to-day lives. Our 2021 results and the progress we have made is a credit to all of our team. Turning now to take a closer look at our safety and financial results. In 2021, we achieved the significant milestone of no recordable personal safety incidents for the second consecutive year.
This is an outstanding result, particularly given we concluded a major maintenance turnaround during the year and is a testament to the quality of people we have working at Marsden Point. Refinery and pipeline throughput continued to be impacted by COVID-related restrictions in 2021. Pipeline volumes were similar to the 2020 year, but around 35% lower than 2019, which was the last year where there were no travel restrictions. Outside of the lockdown periods, we saw a strong recovery in demand for gasoline and in particular in diesel. Demand for jet fuel remained low as a result of the international border restrictions. While refining revenue remained at the fee floor through 2021 for the second year in a row, reported EBITDA was up 44% relative to 2020 from the cost savings from the simplified refinery model.
Capital expenditure was flat year-over-year, which is an excellent result given 2021 included the cost of the crude distiller and CCR maintenance turnaround. This meant free cash flow was positive, achieving our aim of operating cash neutral at the fee floor. Our net debt closed the year NZD 47 million lower. This reflected our successful equity raise towards the end of 2021 to fund the costs of private storage, the first of our growth opportunities at Marsden Point. In our 2021 accounts, we recognized the accounting adjustment arising from the conversion. With the write-off of refining assets and provisions, the costs associated with the import terminal conversion recognized. A revaluation of the import terminal assets occurred and offsets this, with net assets reported at 31 December 2021, equivalent to NZD 1.33 per share.
As we embarked on our strategic review and took such significant decisions to undertake a whole of business change, we had a number of important stakeholders who we've brought on this journey with us, and it is to this that I would like now to turn. As many of you will be aware, the government has taken a keen interest in our transition and the impact it will have on New Zealand's fuel supply chain. As the owner of nationally strategic assets, we have worked hard to be joined up with the New Zealand government at every point, and that continues today.
As well as regular engagement and updates to ministers on transition planning, the Ministry of Business, Innovation and Employment, MBIE, recently consulted on a new fuel stocking policy, and we stand ready to support the government and our customers to meet this policy when the details are finalized. We are also awaiting final details of the biofuels mandate, which is due to come into force in April next year. We believe that our infrastructure will have a key role to play in supporting the development of a biofuels industry in New Zealand, and I'll talk more on this shortly.
We have also worked hard to build a strong and respectful relationship with the different iwi in Northland, and I'm proud that we have been able to sign new long-term relationship agreements with Ngāti Raukawa and Te Parawhau at the same time that we obtained a new 35-year resource consent for the Marsden Point site. While we may not always agree, we are committed to working together to understand each other's perspectives, identify opportunities to support local iwi plans and priorities, and to be good neighbors to our community. With that in mind, we remain an active participant on the Northland Refinery Working Group to support regional transition planning. While our transition has had little impact for most New Zealanders, it was a significant change for our fuel supply chain and for everyone that works at Marsden Point.
We have worked closely with our customers through this period to make sure together, we delivered a smooth transition in New Zealand's fuel supply chain. As CEO, it has been a priority of mine to make sure we took our people with us on this journey and supported them in their own personal transitions, just as they have supported the company and its transition to build a long-term sustainable future. This has included comprehensive workforce transition support programs, including providing at least six months notice and six months redundancy pay, as well as a range of programs to help our people transition to new jobs. We've also had active engagement with unions throughout this period.
Just last month, we were pleased to welcome over 20 employers from around New Zealand and Australia for a careers fair, providing our people looking for new roles with the opportunity to engage directly with other companies looking for people with their skills. I'm pleased to report that our conversion project work continues to track to plan. On 13 April, we released our first quarterly conversion project update, and we intend to keep providing these updates through the year. In our Q1 update, we confirmed that we had safely completed the refinery shutdown to plan despite the ongoing challenges of COVID in the community, and that we had successfully commenced import terminal operations on 1 April. Importantly, the conversion costs continue to track to plan, with NZD 20 million spent at 31 March.
As reconfirmed at the time of our 2021 results, we continue to expect conversion costs to total NZD 200 million-NZD 220 million, which includes contingency. At the same time, we have announced contracted private storage agreements with customers for the provision of an additional 100 million liters of private storage. Our site, which involves the conversion of of existing tanks at Marsden Point at a cost of NZD 45million-NZD 50 million, delivering incremental revenue over 10 years of around NZD 90 million. Shareholders, today we speak to you as a totally different business to last year. The change to an import terminal and Channel Infrastructure on 1 April, when we launched on the New Zealand Stock Exchange under the new ticker code, CHI, was a significant milestone for the company.
After 60 years of operations as New Zealand's only oil refinery, we look back on our past with pride, but because of this change, we can also now look to the future with confidence that we have a sustainable business that will continue to contribute to our community and New Zealand long into the future. Let's now watch a short video.
It is infrastructure that keeps us all connected, fueling our travel, keeping the lights on, keeping us moving. Channel Infrastructure, New Zealand's leading fuel infrastructure company, is the essential connection in New Zealand's energy network. We receive, store, test, and distribute transport fuels. Safely, reliably, and efficiently to the Northland and Auckland markets. Using our deepwater harbor and jetty, 280 million liters of storage capacity, and 107-kilometer pipeline to Auckland, our infrastructure delivers fuel from Marsden Point directly to where it's needed most. Marsden Point has kept Kiwis moving for over 60 years. As we shift from operating New Zealand's only oil refinery, a role we have been proud to hold for generations, our strong heritage has laid the foundation for the critical role Channel Infrastructure will play in keeping New Zealand moving in the future.
Working with our Iwi partners and the wider Northland community, we are committed to preserving and protecting our pristine coastline and maintaining our high environmental and safety standards. As global fuel needs continue to change, and we all look for new energy solutions, our infrastructure will have a key role to play. We see great opportunity to use our Marsden Point site to support the renewable fuels and energy we will need in the future, from biofuels to solar power and hydrogen. Channel Infrastructure is uniquely suited to support New Zealand's energy transition, and we are ready to play a big role in its future prosperity. Now, and in the future, we will connect to Kiwis who can rely on the security and reliability that we provide. We channel New Zealand's energy. We are Channel Infrastructure.
Channel Infrastructure is New Zealand's leading fuel infrastructure company. We are now well-positioned for the future. Let me run through the reasons why. Our business owns and operates critical infrastructure, essential to the supply of fuel direct to New Zealand's largest market. Channel Infrastructure is now New Zealand's largest transport fuels storage terminal. Our terminal handles more fuel than the terminals of Mount Maunganui, Wellington, and Lyttelton combined. We have 180 million liters of shared capacity available under the terminal services agreements, plus 100 million liters of additional contracted private storage. Through the Marsden Point to Auckland Pipeline and the truck loading facility adjacent to our site, our infrastructure supplies the Auckland and Northland markets, which make up 40% of New Zealand's fuel demand. The pipeline supplies all of the jet fuel to Auckland International Airport.
As you would expect, jet fuel is forecast to recover to pre-COVID levels over the coming years as New Zealand reopens its borders, and then continue to grow. Over the long term, international tourism and travel is expected to underpin long-term asset utilization with the shift to sustainable aviation fuels. We have negotiated long-term customer contracts with our three customers, which have now commenced. The fixed and minimum fee components and third-party access to unutilized capacity from 2025 incentivizes customer utilization of our terminal. Take or pay commitments of NZD 90 million-NZD 100 million per annum real over the first six years, together with the fixed private storage revenue, supports the debt funding of conversion costs and provides revenue security while jet fuel demand recovers post-COVID.
In addition, all import terminal services fees payable by customers are indexed to PPI, which provides us additional protection in the current inflationary environment. As a result, we have projected stable earnings, strong cash flows, and a strong balance sheet with a focus on deleveraging to 3x-4x net debt to EBITDA, supporting returning to dividends for our shareholders. The new business model means we expect to have stable earnings and significant cash flow generation moving forward. In 2023, our first full year of terminal operations, we expect EBITDA of between NZD 76 million and NZD 84 million, with high conversion of EBITDA to cash flow as a result of low ongoing capital expenditure and over NZD 400 million of expected tax losses following conversion.
This means we can deleverage to a target of 3x-4x net debt to EBITDA, consistent with an investment-grade rating, which supports our dividend policy of 60%-70% of normalized free cash flow with a return to dividends in 2023. Last week, we launched a retail bond offer. We are looking to raise NZD 100 million, and we have the ability to accept oversubscriptions of up to a further NZD 25 million. The offer, which is open to investors resident in New Zealand and institutional investors, is a 5-year unsecured, unsubordinated fixed-rate bonds with a minimum coupon of 5.8%. The offer is expected to close this Friday at 11:00 A.M., with the interest rate also expected to be set that day and announced on the NZX.
You should have received information on the offer, or you can find the information, including the product disclosure statement, on our website. If you are interested in participating in the offer, you can contact your financial advisor or one of the joint lead managers for more information. Their details are in the product disclosure statement. The bond proceeds will be used to repay a portion of our bank debt and will provide us with enhanced diversification of funding and extend our tenure. Our balance sheet is in a strong position with significant headroom available to fund conversion project costs and no significant maturities in the next 18 months. One of the first actions of our new business was the release of our inaugural sustainability report, Our Transition to a Sustainable Future.
The report, which is aligned with Task Force on Climate-related Financial Disclosures or TCFD standards, more than a year ahead of mandatory reporting in 2023, outlines the company's response to the impacts of climate change on our business, as well as the opportunities and risks for our business from the energy transition that is taking place in New Zealand. The way we all respond to climate change is about more than just bringing down emissions. It's about supporting people who are affected and doing our part to mitigate the impacts on individuals and our community, while at the same time ensuring that we keep fuel affordable and available for everyone. Crucially, the report sets measurable objectives so that we can hold ourselves to account in the future.
These targets include having at least 90% of employees seeking new employment, find new roles, or be retrained within six months of leaving our business. A just transition for people is not an added extra. It's a central part of how the global community must ensure that the impacts of the lower carbon future are not unfairly borne by a single community. That is why it is right that we have such a strong focus on supporting our people who have been impacted by our change to find new jobs. Our transition from refinery to import terminal operations has already delivered a significant reduction in carbon emissions, and we have set ourselves the ambitious but achievable target of achieving net zero Scope 1 and 2 emissions by 2030.
We commit to utilizing our infrastructure to support the decarbonization of the wider transport sector and facilitate customer Scope 3 emissions reduction by 2030. We firmly believe that our infrastructure will have a key role in the decarbonization of New Zealand's transport network, and we are committed to helping our customers, suppliers, and all of New Zealand to achieve this. Shareholders, we have been discussing a change to our business for two years now since the board commenced our strategic review with the goal of determining the best way forward for our business to have a long-term and sustainable future in the face of the most difficult operating environment in our history. As we have always maintained, our goal has been to see a return to a situation where the strategic assets we own are delivering a return for our shareholders.
With our transition comes many exciting growth opportunities for our business, and we are now well-positioned to diversify and utilize our assets to support New Zealand's changing future fuel needs. We have already delivered on some initial growth opportunities with the contracting of additional private storage capacity at Marsden Point. We have additional capacity to provide even more storage in the future, including to support the government's biofuels mandate and proposed domestic inventory policy by repurposing existing tanks at Marsden Point. The Maranga Ra solar project is another exciting opportunity that we are actively investigating, including talking to a number of parties about this potential development. Our interest in developing our own electricity generation through Maranga Ra is driven from a desire to lock in secure, renewable, and affordable long-term electricity supply for the operation of our terminal.
Longer term, we want to maintain optionality across the range of types of fuel and energy Marsden Point can support in the future. Which is why we are working with Air New Zealand on their study of the potential to develop sustainable aviation fuel in New Zealand and with Fortescue Future Industries on their study looking at the potential for hydrogen production at Marsden Point. The second part of our growth platform is the opportunity to leverage our independent operator capabilities across a broader asset base. We are committed to supporting the supply of fuel that New Zealand families, businesses, and the economy need to keep moving, and we are looking forward to the next stage in our journey. I will now hand back to Simon for questions, resolutions, and voting.
Thanks, Naomi. Now to move to resolutions and voting. I'm sure most of you will now be familiar with virtual meetings. You can submit questions using the Q&A tab on the right half of your screen. Should you require any assistance, you can type your query, and one of the Computershare team will assist with the chat function and reply to your query. Alternatively, you can call Computershare on 0800 646 5034. Voting today will be conducted by way of a poll on all items of business. In order to provide all online attendees with enough time to vote, I will shortly open the online voting for all resolutions.
At that time, if you're eligible to vote at this meeting, you will be able to cast your vote under the Vote tab. Once the voting has opened, the resolutions will allow votes to be submitted. To vote, simply select your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply select Change Your Vote. You have the ability to change your vote up until the time I declare voting closed. I now declare voting open on all items of business. The resolutions will now be open in the Vote tab. Please submit your votes at any time. I will give you a warning before I move to close voting. The first four resolutions deal with the election and re-election of four directors.
The board supports all of the directors standing for election or re-election today. In accordance with Clause 8.9.1 of Channel Infrastructure's Constitution and Rule 2.7.1 of the NZX Listing Rules, a director must not hold office without re-election past the third annual meeting following the date that director was appointed for three years, whichever is longer. James Miller and Paul Zealand are both required to retire by rotation, and both being eligible to do so, offer themselves for re-election. Brief biographies for both James and Paul were included in the notice of meeting. Clause 8.13.3 of Channel Infrastructure's Constitution and Rule 2.3.3 of the NZX Listing Rules requires directors to be re-elected individually. As such, we will consider the re-election of James Miller and Paul Zealand separately.
Resolution 1 relates to the re-election of James Miller. I propose that James Miller, who retires by rotation in accordance with Clause 8.9 of the Constitution, be re-elected as a director of the company. I will now ask James to make a brief statement.
Thank you, Simon, for that introduction, and good afternoon, everyone. Today it's my turn to ask for your endorsement to seek a new mandate to achieve the aims and aspirations of our shareholders in the years ahead. Firstly, I'd like to give you a quick recap of my career to date before secondly looking at my governance role on Channel Infrastructure Board. Following my time at university, I spent some 14 years in the sharebroking industry, specializing in the strategy and valuation of energy companies. I'm a qualified chartered accountant, a certified analyst, securities analyst professional, and a fellow of the Institute of Chartered Accountants and the Institute of Directors. I hold a Bachelor of Commerce from Otago University, and I'm a graduate of the Advanced Management program at Harvard Business School. Currently, I'm chair of the NZX, director of Mercury and Vista.
Among other roles I've previously held as Deputy Chair of Accident Compensation Corporation, board positions with the FMA, Vector, and Auckland Airport. On all these boards, I've held roles on their committees, in particular on the audit and risk committees, some of which I have chaired. I'm currently chair of the Audit and Risk Committee and also the chair of the Transition Committee for Channel Infrastructure. The unprecedented, once-in-a-lifetime changes at Channel Infrastructure have involved a huge workload for directors, management, and employees alike. Now we need to settle the business processes and create an exceptional company going forward. As a board, we are determined to deliver on the earnings projections and dividends over the next 10 years, thereby meeting strong shareholder support that gives the company the mandate to grow and create fantastic job opportunities into the future.
I'm passionate about Channel Infrastructure and the company's place in New Zealand. From this new foundation, there is a good potential for growth as the industry changes and consolidates in the years ahead. I ask for your support, and thank you.
Thank you, James. Are there any questions for James? I have not received any online questions. So I will put the motion that James Miller, who retires by rotation in accordance with Clause 8.9 of the Constitution, be re-elected as a director of the company. I'll now ask shareholders to please vote on resolution 1 using Computershare's online platform. Resolution 2 relates to the re-election of Paul Zealand. I also propose that Paul Zealand, who retires by rotation in accordance with Clause 8.9 of the Constitution, be re-elected as a director of the company. I'll now ask Paul to make a brief statement.
Thank you, Simon. Good afternoon, everyone. It's been my privilege to serve your company with an extremely talented and hardworking management team and board who, over the last few years, have navigated a critical change process with incredible skill and compassion. I believe we're well set up to be successful in this next phase of our company's existence. I've been a director of your company for the last six years and filled in for a few months in 2020 as Managing Director until Naomi took over. I sit on the Audit, Risk and Finance Committee, the People, Rem, and Noms Committee, and I chair the HSEO Committee. We've driven hard in the HSEO Committee to support management to ever improve in performance and create an ever safer place for our people to work. This effort is never complete.
However, we have during my tenure, seen major improvements in our personal and process safety performance, including achieving a period of more than two years recently without any recordable injuries to our staff and contractors. This is an outstanding performance, especially during a period of restructure, shutdowns, COVID, and uncertainty for everyone. I bring to your board nearly 50 years of experience working in hazardous operational facilities and continue to apply the insights I've gained to drive for excellence in our HSEO and all other areas of performance. I sit on three other boards, all of which are in the energy or operational infrastructure industries, all of which are planning for the energy transition we must all achieve. The insights I gain in these areas are of direct relevance to Channel Infrastructure as we navigate our own transition.
I'm a chartered member of the Institute of Directors in New Zealand and continue to support my own governance development with attendance at IOD and similar seminars and workshops. I would be honored to receive your support to continue as a director of Channel Infrastructure and can assure you of my continued passion and dedication to your business. Thank you.
Thank you, Paul. We are not in receipt of any questions for Paul at the meeting, so I will put the motion that Paul Zealand, who retires by rotation in accordance with Clause 8.9 of the Constitution, be reelected as a director of the company. I now ask shareholders to please vote on Resolution 2 using Computershare's online platform. Resolutions 3 and 4, election of directors in accordance with Clause 8.8 of Channel Infrastructure's Constitution. Any director appointed to fill a casual vacancy or as an addition to the board must retire at the next annual meeting of the company, but shall be eligible for election at that meeting. Andrew Holmes and Anna Molloy were appointed by the board and both being eligible to do so, offer themselves for election. Brief biographies for both Andrew and Anna were included in the notice of meeting.
As required by the company's constitution and listing rules, we will consider the election of Andrew Holmes and Anna Molloy separately. Resolution 3 relates to the election of Andrew Holmes. I propose that Andrew Holmes be elected as a director of the company. I'll now ask Andrew to make a brief statement.
Thank you, Simon. Good afternoon, shareholders. If I'm to represent you as a director of the board of Channel Infrastructure, I feel it's important that you know something about me. I'm a Brit and graduated as a chemical engineer from University of Bath in 1985. I joined BP straight from university, which turned out to be a good decision as I worked for them for 34 years, and I also met my future wife within the first month. Gail is also a Brit, and we have five children, three boys and two girls. We moved to Melbourne in 2013 and have now put down roots. Four of the kids live in Melbourne. The eldest has moved back to London for a few years, and we're now Aussie citizens. During my time in BP, I worked almost exclusively in the refining, trading, supply, terminals, and retail businesses.
I spent the first half of my career running operations in refining and terminals, and the latter 16 years as the CEO of businesses which got larger and larger until my last CEO role was of the Asia Pacific business, which included New Zealand, Australia, China, and Indonesia. It also included the global aviation business, Air BP. Not surprisingly, during my career, I picked up a lot of experience, which I believe is relevant to Channel Infrastructure. Here are five examples. Improving safety in a high hazard operation. In my six years running the Asia Pacific business, recordable injuries reduced by 80%. Refinery to terminal conversions. I executed two of these, one in Turkey 20 years ago and one in Brisbane six years ago. Executing growth strategies, usually through a combination of cost control and top-line growth through customer acquisition. Aviation business growth.
I ran Air BP for 10 years, and during that time, profitability tripled and we entered six new countries. Acquisitions and divestments. I led 14 of these totaling $2 billion over the last eight years. One-third of them were acquisitions, 2/3 of them were divestments. Since leaving BP in 2019, I am developing a portfolio career which involves venture capital. I'm a member of two funds, one global, one Australian, and I mentor startups in energy transition businesses. Green hydrogen research. I'm on the advisory board for a cooperative research consortium and non-executive directorships.
If successful, this will be my first, and I'll be looking for one other. I'm excited to be a candidate to join the board of Channel Infrastructure as I believe I can help deliver the strategy of running operations safely, reliably and efficiently, executing the highly complex refinery to terminal conversion project, and setting and executing the business growth strategy as the most successful fuel infrastructure business in New Zealand. Should you confirm me as a director, you can rely on me to work for your interests. I will do so in a balanced way that ensures that the company, its customers and its employees are valued. I'm passionate about this organization, and I want to be involved in it because I believe I can help. Shareholders, it's a privilege to seek election as a director of Channel Infrastructure, and I ask for your support. Thank you.
Thank you, Andrew. We are not in receipt of any questions for Andrew, so I will put the motion that Andrew Holmes be elected as a director of the company. I now ask shareholders to please vote on resolution 3 using Computershare online platform. Resolution 4 relates to the election of Anna Molloy. I propose that Anna Molloy be elected as a director of the company. I will now ask Anna to make a brief statement.
Thank you, Simon. Good afternoon, shareholders. I'm feeling privileged today to be seeking election to the board of Channel Infrastructure. I'm only sorry that this AGM isn't in Northland. I'm a keen sailor and boatie, and one of my favorite anchorages is a pristine little bay just across from Marsden Point. You will have seen from my bio in the meeting materials that I graduated with bachelor's degrees in Chemical and Materials Engineering and Commerce from University of Auckland. I'm also a qualified chartered financial analyst. I've mainly spent my career in funds management and investments. I've been an investment manager investing into a range of private and listed companies. I've also worked as an equity research analyst, where I specialized in energy and infrastructure stocks. With my background in chemical engineering, I've always had a strong interest and natural affinity to energy and infrastructure.
In 2017, I was lucky enough to be selected as future director for the NZX. This provided me with a fantastic introduction to governance. I'm now an independent director of ANZ Investments and Winton Land, as well as Chair of Winton's Audit and Risk Committee. Back when I was an equity analyst, I recall observing how little influence Refining NZ had over its own destiny. The one big driver of value, the refining margin, was outside the company's control. Our new company, Channel Infrastructure, is in a completely different position. Cash flows are now much more certain, so the company can optimize its capital structure and deliver reliable dividends to shareholders. Channel is uniquely positioned to leverage its strategic assets, capabilities, and balance sheet to diversify and grow earnings, supporting New Zealand's transition to future fuels. I've spent much of the last month reading previous board papers.
I can see that the board and executive have worked tirelessly over the last two years to ensure Channel has a solid foundation for an exciting future. Should you confirm me as a director, I look forward to working with the team to build on the company's culture of excellence and accountability, ensuring appropriate returns to shareholders and a sustainable future as New Zealand's leading fuel infrastructure company. Thank you.
Thank you, Anna. We have no questions of Anna from shareholders. I will put the motion that Anna Molloy be elected as a director of the company. I now ask shareholders to please vote on resolution 4 using Computershare's online platform. We now move to resolution 5, which relates to the authorization of auditors' fees and expenses. I propose that the directors be authorized to fix the fees and expenses of Ernst & Young as auditors to the company for the financial year ending 31 December 2022. Are there any questions to that resolution? No, I have no questions on that resolution. I put the motion that the directors be authorized to fix the fees and expenses of Ernst & Young as auditors for the company for the financial year ended 31 December 2022.
I now ask shareholders to please vote on resolution 5 using Computershare's online meeting platform. We now move to resolution 6, which relates to the revocation and adoption of Channel Infrastructure's Constitution. As noted in the notice of meeting, as part of the company's conversion to an import terminal, it is proposed the company take this opportunity to apply the new company name and brand branding to the constitution, as well as modernize its terms by updating or removing outdated legislative references and unnecessary repetitions of legislation. A summary of the proposed changes to the constitution is included in the notice of meeting. I note that this matter requires approval of shareholders as a special resolution.
I now propose that the current constitution be revoked and a new constitution in the form presented at this annual meeting and signed by the chairperson for the purpose of identification, be adopted with effect from the date of this annual meeting. Do we have any questions? No, we have no questions. I put the motion, that the current constitution be revoked and a new constitution in the form presented at this annual meeting and signed by me as chairperson, for the purpose of identification, be adopted with effect from the date of this annual meeting. I now ask shareholders to please vote on Item six using Computershare's online meeting platform. Ladies and gentlemen, that concludes our discussion on the items of formal business. In a couple of minutes, I will close the voting system.
Please ensure that you've cast your vote on all resolutions online via Computershare's online meetings platform. I will now pause to allow you time to finalize those votes. Thank you, ladies and gentlemen. The voting is now closed. Our auditors, Ernst & Young, will act as scrutineers. Once they've completed their review, the final results of the poll will be released to the NZX and posted on our website. We expect this announcement to be later this afternoon. Now that we've completed the formal part of the meeting agenda, if there are any items of general business that shareholders wish to raise, including in relation to my address or Naomi's presentation earlier in the meeting, please do so through the Q&A function online. I note only shareholders or their proxy holders are entitled to ask questions.
In the interest of encouraging wider participation, we would ask that shareholders and proxy holders limit themselves to two questions. I would now like to invite you to ask any questions you may have in relation to my address and Naomi's presentations. We have received a number of questions in advance, so I'll start with some of these. Firstly, we have a question relating to dividends, and it asks us to indicate the director's expectation for dividends in the first year. Please indicate the director's expectations for dividends in the first year, assuming 60%-70% of free cash flow. Thanks for that question. It is one I'm sure most investors will be rightly interested in and one hopefully we addressed in today's presentation.
With the change to our Channel Infrastructure, we have reset our business and financial risk profiles with lower earnings volatility, lower operational risk and capital intensity, and reduced cost and carbon exposure. This earnings stability, together with the strong cash generation from our contracts and tax losses, enables us to deleverage to 3x-4x net debt to EBITDA, consistent with investment grade, and that allows us to return to dividends in 2023. We have stated our dividend policy is a payout ratio of 60%-70% of normalized free cash flow. The next question refers to the shared import terminal capacity and asks what we mean when we refer to shared capacity. The shared refers to our fuel company customers sharing the use of these assets.
Whilst we're on the subject, it's worth noting that the terminal capacity is utilizing the existing tanks which are being converted at the moment. We do have additional capacity to add even more storage should it be required. We see this as one of the number of growth areas for the business going forward, as noted throughout this presentation. The next question is, how large are our land holdings at Marsden Point, and is it freehold or leasehold land? The full question was that the annual report mentions that the fair value of assets are NZD 1.33 per share. The land area is approximately 150 hectares, of which about 65% is not being used by the go-forward import terminal. Our next question relates to the workforce and how many employees have left the business to date.
Of those, how many have been supported into new employment or training? I'll ask Naomi to answer to cover this one, although it was covered partly in her speech.
Thank you, Simon. I'm pleased to report that of the approximately 150 people who will have left our business by the end of this year, less than a quarter of those people have not yet secured future employment. We know that a large number of these people are currently in the recruitment process for future employment elsewhere. We're expecting the number still looking for new jobs to continue to decrease.
Thanks, Naomi. Well, that was the end of the sort of questions that came in. Now we'll go to the questions that are have come in during the meeting. The first set of questions are about electricity, and I'll pass over to Naomi to cover those.
Thanks, Simon. The first question is in relation to the recently announced transmission pricing methodology and whether there is any update to our guidance in relation to electricity pricing. As you may be aware, the new TPM was announced earlier in April. The next step is that the pricing is then worked through by the lines companies before it is passed down through the different users of the distribution system.
We're still at a point where we're working through that with our local lines company, Northpower, and we'll continue to work with them, and with Transpower to make sure that the future transmission and distribution costs into our site, both for our terminal operations, but also hopefully for future solar project operations are affordable and make that supply competitive. There's a question about whether there's any update on the Maranga Ra project and the potential savings that might come from that and timing and funding of it.
The update there is that we have been really focused on these transmission pricing changes and understanding the impact those have to transmission and distribution costs to our site before we take the next step with that project. We are getting closer to that with the TPM now released. We do see significant opportunity to reduce electricity costs both by making sure the transmission and distribution pricing to the site is competitive but also by accessing long-term supply from Maranga Ra or adjacent developments.
You'll see the indication of some of the potential opportunity in our cost guidance range that we've provided, which gives you a feel for some of the range, both on the transmission distribution side as well as on the electricity price side. If we can get long-term supply to site at a cost based on the cost of supply distinct from the very high costs of electricity we are seeing in the spot market at the moment in New Zealand. The final question from the shareholder related to Z Energy's interest in the Wiri to airport pipeline and also the JUHI asset at the airport. Whether we had any interest in those assets.
You would be aware that the second part of our growth platform is focused around looking at where there are opportunities to leverage our capabilities as a terminal and infrastructure operator across a broader asset base. We are absolutely watching those discussions with interest and talking with the parties involved as well as with other users of that infrastructure to understand the intentions and potential options that might become available down the track. I think that one still has a little way to play out. It's just right at the very start at the moment with Mobil having submitted a request for ComCom approval.
Thanks, Naomi. For us on the screen from shareholders. Just, I'm told we have some questions. I'm going to wait 'til I can get them up. For all to see is the output from Maranga Ra.
The question unfortunately quickly dropped off our screen, didn't it, Simon? I think the question was-
Yes.
A Maranga Ra one and whether the capacity from that project was intended for internal use, or for export back to the grid. The options there are still very much open. Maranga Ra at peak production will produce electricity well above the level required by the Marsden Point site. It will have the potential to export back to the grid. But equally, if we confirm that capacity, there's the potential for storage to provide a consistent supply base to our site. They're all the options that we'll be looking at as we continue to assess that project and how it can meet our objective of having a long-term, affordable and wholly renewable electricity supply source for our site.
Thanks, Naomi. I see the next question. A 9-person board seems large for what is now a much simpler business. Do you plan to continue with nine directors after Mr. Allen retires? I will answer that. A nine-person board does seem high, and we actually currently, after the resolutions are voted on today, will be an 8-person board, with myself going off, taking that down to seven. As part of our governance review, we have established that a smaller board is suitable for this business. I would note that the business is still in transition, and it is important that the board has the right mix of skills right now while we decommission the refinery. I hope that answers the question accurately.
Please explain about the proposal to transfer assets to another entity. What value will the assets be transferred at, and what are the reasons for the transfer? This is quite a technical. I'll call it a technical financial question. I'm going to ask Naomi to answer that question.
Thanks, Simon. The transfer that's been referred to is a wholly internal transfer within the Channel Infrastructure group, where the assets that will be utilized in the import terminal operation will go into a wholly owned subsidiary of the parent company and sit alongside the other wholly owned subsidiaries of the parent company, which include our laboratory business, as well as our Maranga Ra subsidiary. It's really intended to set the group up with a corporate structure aligned with the range of business opportunities and business lines of business that we would look to have in the future and provide us with some more flexibility from a corporate structure perspective.
Those assets continue to remain wholly owned by our company and our shareholders. All of those transfers are done at market value on terms that reflect the value of those assets.
Thank you, Naomi. This next question has, to a certain extent, been covered by Naomi, but I'll ask you to just to fill out the answer to the question. With relation to longer term plans, hydrogen production plans, will CHI build more new infrastructure to produce the hydrogen in the future? When will the plan from FFI be released?
Thanks, Simon. In December last year, we announced that we had signed an MoU with Fortescue Future Industries to undertake a study in the potential for hydrogen production at Marsden Point in the future. This is very much the first step in assessing the potential feasibility of hydrogen production at the site. We're expecting the results of that study to be completed later this year. Hydrogen would require new infrastructure and new facilities at Marsden Point. Part of the study work is to look at exactly what that might look like and what would be required for it to be economically feasible. Hydrogen, it's worth noting, is very much a long-term option for the business.
We see that sitting 10+ years away from us now, but it is one of the long-term options that we wanna make sure we're looking at now, so that as the range of future fuel options plays out, which is likely to be more diverse than the more limited fossil fuels we rely on today. Our infrastructure is playing a role across the range of fuels that it can support.
Thank you, Naomi. Now, we do not have any further questions at this stage. There being no other matters of business, I thank you for attending virtually today. This meeting has been a first for the company under its new name.