APA Group (APA)

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http://www.apa.com.au/

APA Group (APA) is Australia’s largest natural gas infrastructure business, owning and/or operating in excess of $12 billion of energy assets.
Its gas transmission pipelines span every state and territory in mainland Australia, delivering approximately half of the nation’s gas usage. APA has direct management and operational control over its assets and investments.

http://www.apa.com.au/media/228505/apa%2...y14%20.pdf

APA eyes FY15 earnings lift
MICHAEL RODDAN OCTOBER 24, 2014 10:00AM
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APA Group is performing in line with guidance in the first quarter of fiscal 2015, which should see normalised earnings increase up to 9 per cent to $760 million.

The natural gas infrastructure group told shareholders at its annual general meeting today that normalised continuing business EBITDA is expected to increase between 6 per cent and 9 per cent, to reach between $740m and $760m.

APA said it expects statutory earnings before interest, taxation, depreciation and amortisation to come in between $1.17 billion and $1.19bn.

But the company expects to clock up net interest costs between $315m and $325m.

APA said distributions for the 2015 financial year will be at least equal to fiscal 2014's distribution of 36.25 cents.

APA said the sale of its Envestra shareholding,will ensure sufficient capital to fund further organic growth capital projects for at least the next 12 to 18 months.

The group said it is continuing the development of expansion projects and the east coast gas grid, along with a feasibility study to connect the grid to the Northern Territory. The study is
expected to be completed within financial year 2016.

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APA stands by NT gas link

Angela Macdonald-Smith
737 words
13 Nov 2014
The Australian Financial Review
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English
Copyright 2014. Fairfax Media Management Pty Limited.

APA Group chief executive Mick McCormack has rejected suggestions that Northern Territory gas is an ­unviable option for users in the eastern states, arguing that neither the ­availability of gas, distance nor cost would present insurmountable hurdles. He added timing wouldn't necessarily be an obstacle, particularly if the NT government commits to make available gas from its supplies. That could bring forward a final investment decision on a pipeline to link the NT in to the national gas grid to late next year.

The plan to use NT gas to help ease a looming shortage on the eastern seaboard has been criticised as ill-formed and unlikely by some commentators, including the Grattan Institute.

But on Tuesday, Central Petroleum chief executive Richard Cottee announced an accord to supply gas from Central fields near Alice Springs to Incitec Pivot in Queensland.

"Slowly but surely the market is being tested as to, is this project a goer or not," Mr McCormack told The ­Australian Financial Review.

"For all the naysayers that is the first thing to point out that there is a potential user of gas that is reasonably close to gas that could come out of the NT."

APA, the country's biggest gas pipeliner, has taken the lead in studying potential links between the NT gas ­pipeline and the national grid, and is spending $2 million on a feasibility study on three potential routes.Mt Isa route boosted

The Central-Incitec agreement gives a boost to the route east to Mt Isa in Queensland, a shorter and cheaper route than one between Alice Springs and Moomba in South Australia, which has more momentum politically. The Mt Isa link is expected to cost about $800 million to $900 million, compared to as much as $1.3 billion for a longer link from Alice Springs to Moomba. It would require a smaller volume of gas to make viable, and be quicker to build.

"Richard has put a stake in the ground in respect of a potential route directly across to Mt Isa – and that is ­definitely the cheapest – but let's see what happens, let's see what transpires with [NT chief minister] Adam Giles and the process out of the NT government," Mr McCormack said.

An announcement is expected within days from the NT government. It could include a commitment on making gas available from the supplies contracted by NT utility Power and Water.

Such a bank of gas would give other gas players in the NT time to work up their own resources for the pipeline.

"That would give a pipeline project something to actually work with from day one," Mr McCormack said.

"If the pipeline was built tomorrow and there was gas available for it for a good couple of years, that then ought to give the other gas suppliers the time required to bring on further resources."

Work by Port Jackson Partners for the NT government found that 60 petajoules a year of gas would be the ­minimum required for an Alice Springs-Moomba route. But a link to Mt Isa would require considerably less, Mr McCormack said. APA was working toward delivering gas into the south east with a landed price of $8 to $10 a gigajoule, which is no more expensive than prices being talked about for local supplies in the east, he said. Deliveries could start in 2018, assuming streamlined approvals processes.Scale of economies

An NT government tender process for the pipeline development means APA will be up against rivals such as Jemena,Duet Group and infra­structure funds. But Mr McCormack said that because APA owned pipelines on either side of the proposed new link, it could provide the most efficient transportation. "Gas pipeline infrastructure is very capital intensive and the more you have of it interconnected, the lower prices that can be offered to all customers," he said. "That's the real benefit APA brings to the table here: we've got the scale economies, we've got interconnected grids in the southeast so customers can benefit from these efficiencies."

The NT gas pipe link would create a single grid connecting four LNG export projects, probably 100 delivery points for gas into the grid, and competition between gas supply basins. "The flow of gas will be driven by what the market requires," he said.

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NT pipeline idea viability unlikely

Ben Potter
661 words
11 Nov 2014
The Australian Financial Review
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English
Copyright 2014. Fairfax Media Management Pty Limited.

A plan by the Northern Territory and NSW governments for a pipeline they say could help plug NSW's critical gas shortage won't do the job, and wouldn't be viable without huge public subsidies anyway, according to energy experts.

Grattan Institute energy program director Tony Wood said the agreement to examine the plan was such an ill-formed idea it looked like a "Post-it note from school".

"Nothing is happening," he said.

Northern Territory chief minister Adam Giles and NSW Premier Mike Baird on Friday said they would urgently accelerate development of a pipeline from central Australia east to meet NSW's need for more gas.

Mr Wood and other experts said the pipeline – costing about $900 million to $1.3 billion depending on the route – could not deliver gas to NSW at a competitive price without subsidies.

That means Northern Territory gas could not help eastern Australia overcome a price spike – from current prices of $5 to $6 per gigajoule to as much as $8 to $10 per gigajoule – expected in the next few years as buyers and sellers focus on a looming supply squeeze. Manufacturers such as BlueScope Steel say they would not be viable at such prices.

Northern Territory gas would likely not be available in commercial quantities until after 2020, and would not be able to meet supply shortfalls facing NSW from 2015 to 2018 as existing domestic contracts end and Queensland's liquefied natural gas international exports accelerate.

The Northern Territory doesn't have nearly enough gas to justify the pipeline. Half a dozen eastern states' gas sites – from the Otway Basin off the Victorian coast to the Cooper Basin and unpopular NSW coal seam gas fields – could supply the gas cheaper than Northern Territory gas could be delivered, the experts said.

"There's no real need for the gas, and the volumes you'd need to underpin the pipeline – it's difficult to see who would contract for that much gas into NSW," Mr Wood said.

"There's no way you could see it being landed at a price below [$8 to $10 per gigajoule]. It doesn't solve for either price or volume."

The proposal helps the NSW government show it is doing something about the looming gas squeeze without having to approve thorny coal seam gas projects in the Pilliga scrub and Gloucester before the state election, which will be held in March.

It would also help the Northern Territory government offload surplus gas it is committed to buy from the Blacktip field operated by Eni of Italy, which could be as much as five to 10 petajoules a year, worth $30 million to $60 million at a delivered price in Darwin of about $6 per gigajoule. But much larger volumes – in the order of 40 to 60 petajoules a year – would be needed to justify the pipeline, another expert said. "Who is going to pay the subsidy?"

The plan is backed by the Council of Australian Governments and the federal government, prompting fears taxpayers will be asked to chip in.

The NSW government favours the most costly $1.3 billion pipeline from the Amadeus Basin near Alice Springs to Moomba in South Australia – the most direct link to Sydney. The $900 million option would link the Amadeus pipeline to southwest Queensland, and a 620-kilometre option would link Tennent Creek to Mt Isa. APA Group owns the Amadeus, Moomba-Sydney and Mt Isa pipelines, and would not require the new link to pay its own way entirely if it won the tender.

APA Group chief executive Mick Mccormack acknowledged there would be more potential supply in the east as prices rose. "But the fact is the market is waiting to see the colour of the gas," he said. Mr Mccormack said APA began a feasibility study in February without expecting a subsidy but "firstly to answer the question, is it viable?"


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