Apa Group · ASX:APA

Apa — Corporate Update (June 2010)

47 slides from Apa's corporate update, June 2010

  1. Slide 1: APA 2010 Site Visit: Expanding NSW gas infrastructure

    APA2010SiteVisit ExpandingNewSouthWalesgasinfrastructurefor agrowingenergymarket WaggaWaggaandYoungNSW June2010 Disclaimer TheinformationcontainedinthispresentationisgivenwithoutanyliabilitywhatsoevertoAustralianPipelineTrustor APTInvestmentTrustoranyofitsrelatedentities(collectively“APA”)ortheirres

  2. Slide 2: APA Group overview and strategy

    APA2010SiteVisit APAGroupoverviewandstrategy MickMcCormack ManagingDirectorandCEO 3 FromIPOinJune2000… June2000 June2010 Infrastructureowner Integratedoperating andmanager business Market $0.49billion $1.95billion capital S&P/ASX100 Assets $1.3billion >$8billion owned/ 7,000km 12,700km operated gast

  3. Slide 3: Quality infrastructure portfolio across Australia

    QualityinfrastructureportfolioacrossAustralia 5 Successfulstrategyimplementation „ FromIPO ”focusongastransmissionassets… pursuedevelopmentandacquisitionofothergastransmissionassets” „ MajorphasesinAPA’sgrowth APA FY2010 „ Acquiredminorities, achieving100%ownership „ Acquisitionand ofmajorpipelineas

  4. Slide 4: Building on APA's strengths

    BuildingonAPA’s strengths „ Unrivalledgasassetfootprint Australiangastransmissionpipelinesownersbylength(km) – largesttransporterofnaturalgas Prime acrossAustraliabypipelinelength, Infrastructure 1,105* capacityandvolume Duet 1,112* SingaporePower 1,424 „ Integratedportfolioofgaspipelineassets EpicE

  5. Slide 5: APA strategy for sustainable, profitable growth

    APAstrategyforsustainable,profitablegrowth Continuetomaximisevalueforstakeholders „ FocusingongasinfrastructureassetsinAustralia’sgrowinggasmarketandenhancing APA’sportfolioofassets – Abundantdomesticgasreserves – Increasingdemandfornaturalgas, inparticularforpowergeneration – Gasusersfocusedonreduc

  6. Slide 6: Commercial drivers underpinning APA's growth

    APA2010SiteVisit CommercialdriversunderpinningAPA’sgrowth RossGersbach GroupManagerCommercial 11 Eastcoastenergymarket „ Essentialingredientsforpipelinegrowth– supplyanddemand „ Abundanceofindigenousgasreserves – conventional,coalseamgas,tightgas,shalegas „ Increasinguseofnaturalgas – Cleancredentia

  7. Slide 7: Abundant east coast gas supply

    Abundanteastcoastgassupply EastAustraliaprovenandprobablegasreserves(PJ) End2000 End2000 End2009 End2009 Vic(Gippsland,Bass,Otway) 5,907 6,709 SA(Cooper) 3,435 1,151 Qld(Bowen/Surat) 108 204 QLDcoalseamgas 0 23,458 NSWcoalseamgas 0 2,469 TOTAL 9,450 33,990 23,662PJ 3,435PJ 108 PJ „ In10yearseastAust

  8. Slide 8: Natural gas use by state

    Naturalgasusebystate Uniquestatecharacteristicshasinfluencedgasdemand,andcontinuestoimpactfuturedemand Eas te rn Aus tralia His toric Gas Cons um ption by State s „ VICTORIAhasthehighestgasdemand.Rapid 300 growthinthefirst10yearsasthetransmissionand distributionsystemswereextendedthroughthe 250 stat

  9. Slide 9: Increase in gas fired power generation

    Increaseingasfiredpowergeneration Locationofnewandproposedgasfiredgeneration „ Reflectstheshifttolesscarbonintensivefuels. APAassetsandinvestments „ Growthinelectricitygeneratedfromgas(1) Otherpipelines Proposed/recentlyconstructed – Averagegrowthrate– 5%pa gaspowergeneration – Shareoftotalgeneratio

  10. Slide 10: Clean energy policies encouraging gas use

    Cleanenergypoliciesencouraginggasuse Nationalpolicies „ Renewableenergytarget(RET)– 45,000GWh/aby2020 – 41,000GWh/aofelectricitygenerationtobesuppliedbyrenewablefuel– hydro,wind,solaretc(1) – Windgenerationwilldominate– estimate7.000MWofnewinvestment – Gasfiredgenerationtobackupintermittentwindgener

  11. Slide 11: Development and growth opportunities

    Developmentandgrowthopportunities Opportunitiesdrivenbypowergeneration,supplysecurityandtransitiontocleanerfuels All pipelines Queensland CSG/LNG - Expansion opportunities for gas - New pipeline and gas storage transportation and gas storage opportunities Carpentaria Gas Pipeline - New compressor st

  12. Slide 12: Economic regulation of APA's pipelines

    EconomicregulationofAPA’s pipelines „ Regulationoverview „ Pipelinecoverage „ APAassetsandregulation „ Regulationandpipelineexpansions „ Generalregulatoryupdate 23 Regulatoryoverview Regulator APAAssets Comment Australian Priceregulated „ TheAERisresponsiblefortheeconomicregulationofgas Energy VTS t

  13. Slide 13: Regulatory coverage of Australian pipelines

    RegulatorycoverageofAustralianpipelines „ Reducedregulatorycoverage – Mostpipelinesontheeast coastareuncovereddueto interconnectionofpipelines andincreasedsupply optionsformarkets „ Coverageofgreenfield pipelines – Applyfor15yearexemption fromcoverage „ Coverageofpipeline expansions Coveredpipelines

  14. Slide 14: Regulatory assets

    Regulatoryassets 50%ofrevenueisattributabletoAPA’spriceregulatedassets APA’s priceregulatedassets RegulatedRevenueSplit „ VictorianTransmissionSystem(51%ofFY10forecasted CentralWest CentralRanges regulatedrevenue) Pipeline1% Pipeline1% „ APAGasNetwork(22%) Envestra Distribution Network5% Victorian „

  15. Slide 15: General regulatory update

    Generalregulatoryupdate „ Differencesbetweeneconomicregulationofgasandelectricityassets „ Regulatoryandmarkettrends „ GoldfieldsGasPipeline– ERAfinaldecision 29 Meetingcustomerrequirements Creatingvaluebydeliveringservicesthatmeetcustomerneeds „ Driversoffuturegrowthandchangeinthemarket „ Customerre

  16. Slide 16: Drivers of future growth and customer requirements

    Driversoffuturegrowthandchangeinthemarket „ Increasinggassupplyanddemand „ Gasfiredpowergeneration „ Climatedrivenlegislativechanges „ CoalseamgasforLNGexport anddomesticuse „ ShortTermTradingMarket(STTM) „ Verticallyintegratedplayers „ Competition … andmostimportantly, „ Customerrequirements 31 Cus

  17. Slide 17: APA Commercial team aligned to customers

    APACommercialteamalignedtocustomers „ Nationalteamstructure – Salesteamsresponsibleforcustomerportfolios – ‘National’ contractsmanagementand commercialoperations – Supportedbynationalbusinessprocesses „ Customerfocus – Accountmanagementmodel – ‘Wholeofcustomer’ view „ Serviceexperience – Single‘stan

  18. Slide 18: What is the STTM?

    WhatistheSTTM? „ Marketforwholesaletradingofgasatdefined hubs(SydneyandAdelaide) „ AustralianEnergyMarketOperator(AEMO) operatestheSTTM „ Eachhub“scheduled” and“settled” separately „ Gasistradedadayaheadoftheactualgasday atdayaheadprice(“exantemarketprice”) „ Marketsettlesdailyie.buyerspayAEMOfor ga

  19. Slide 19: Why customers want storage services

    Whycustomerswantstorageservices Storageservicesprovidethemeanstomanageliabilitiesand captureopportunities „ Peaking – shortburstsofhighdeliverabilityrequiredduetoshorttermmarketdrivers(spikesin demand) „ Loadfactormanagement – storinggasduringlongperiodsoflowdemandanddeliveringitduringdemandpeaks „

  20. Slide 20: APA's storage capability

    APA’sstoragecapability Currentstoragecapabilityandexpansionopportunities „ Mondarra undergroundgasstoragefacility(WesternAustralia) – Significantwithdrawalcapacityexpansionproposedtomeetmarketdemand – StartofinterconnectedpipelinesysteminWA „ LNGstoragefacility(Victoria) – Originallydesignedforsyste

  21. Slide 21: Understanding MSP capacity and services

    UnderstandingMSPcapacityandservices Thoughputonly capacity „ Maximumcapacity(preexpansion(1)) 380TJ/d „ Currentmaximumcapacity(postexpansion(1)) 420TJ/d – Currentcontractedforwardhaul approx320TJ/d – Otherservices(egstorage) remainingcapacity(100TJ/dequiv) „ MaximumcapacitypostJune2010upgrade(2) 438

  22. Slide 22: MSP well positioned into the future

    MSPwellpositionedintothefuture FutureMSPrevenuegrowthsupportedby: „ Scaleeconomicsandextensivefootprint „ Queenslandcoalseamgas(CSG)intoNSW „ NSWCSGintoSydney,regionalandothermarkets „ GasflowintoandfromVictoriaviathesouthernlateral „ GrowingpresenceofgaspoweredgenerationinNSW „ SydneyasSTTMhub requ

  23. Slide 23: Example: Southern lateral expansion

    Example:Southernlateralexpansion IncreasedstoragecapacityontheMSPsouthernlateral „ ApprovalbyDepartmentofPlanningon8June2010,projectcompletebyendof September „ Increasestoragecapacityby30TJto72TJ „ Gascanbedeliveredto powerstationthroughtheday andrefilledovernight „ Totalcapitalinvestmentof $90milli

  24. Slide 24: Delivering the vision of the east Australian gas grid

    DeliveringthevisionoftheeastAustraliangasgrid Aseamlesssalesandserviceexperienceforallourcustomers „ “Infrastructure” Layer – existingpipelines(APAandothers)formgridbackbone – continuedenhancementofexistinginfrastructurebyAPAandothers 1 2 „ “Service” Layer 3 – Technologyandprocesschange – Commercial

  25. Slide 25: Operations

    APA2010SiteVisit Operations StephenOhl GroupManageroperations 49 Operationsdivisionkeyfocus „ HS&EExcellence – ToachieveHS&EExcellencethroughthereinforcementofasafetycultureandtheuseand improvementofconsistent,robustsystemsacrossAPAnationallytargetingcontinuous improvementinHS&EKPIs „ BusinessTransf

  26. Slide 26: Operations division functions

    Operationsdivisionfunctions AssetManagement& Transmission Networks Engineering DaytoDayFunctions DaytoDayFunctions DaytoDayFunctions • ResponsibleforallAPAhighpressure • ResponsibleforAPANetworksand • StandardisingAssetManagement pipelinesandalsooperationofEII management,operation,etcofEnvestra acro

  27. Slide 27: Developing a new project

    Developinganewproject Commercial 1. IdentifyOpportunity Operations Commercial 1. Operateasset 1. Ensureongoing compliancetoGTA requirements AssetManagement& Engineering Operations 1. Scopeproject 2. Preliminarycosts 1. SupportAM&E AssetManagement Projects Commercial &Engineering 1. Procurement 1. De

  28. Slide 28: Types of pipeline expansion options

    Typesofpipelineexpansionoptions „ Alterationofexistingpipelineoperatingparameters – Canthepipelineinlet/operatingpressurebeincreasedorthepipelineoutletpressure/s bereduced?(doublingthepressuredropacrossapipelinecanincreasetheflowcapacity byuptoapproximately30%) – Cantheinletoroutletflowprofilesbealt

  29. Slide 29: Expansion case study: Roma Brisbane Pipeline

    Expansioncasestudy:RomaBrisbanePipeline „ Commissioned1969asfullfreeflowpipelinewithtwodeliverypoints(397kmof250mmNBClass600(7.2MPa), 38kmof300mmNBand2kmof200mmNBClass300(4.2MPa). „ Addedsix750KWcompressorstationsprogressivelyfrom1982to1987. „ Added414kmof400mmNBClass600(9.2MPa)loopinginsixstagesfro

  30. Slide 30: Young Wagga Pipeline Looping

    YoungWaggaPipelineLooping 59 YoungWaggaPipelineLooping(cont) Background „ The131kmYoungWaggalateralis300mmNB,Class600(originally8.1MPa)andinitiallyoperatedatupto 6.0MPafollowingcommissioningin1981. „ The88kmWaggatoCulcairnInterconnectis450mmNB,Class600(10.2MPa)commissionedin1998. „ The2005proposalto

  31. Slide 31: Young Wagga Pipeline Looping project details

    YoungWaggaPipelineLooping(cont) Projectdetails „ TheYoungWaggaloopingdesign(firststage)is61kmof450mmNB,Class600(10.2MPa) pipeline,allwithintheexistingpipelineeasement „ Milestonestodateare: – 23March2009 ProjectDevelopmentApplicationsubmittedtoNSWGovernment – 15September2009 TermsheetexecutedwithOri

  32. Slide 32: Building a new pipeline

    Buildinganewpipeline 63 YoungWaggaPipelineLooping(cont) 64

  33. Slide 33: NSW Victoria Interconnect

    NSWVictoriaInterconnect Background „ TheNSWportionoftheInterconnectwasconstructedbyEastAustraliaPipelineLtdas88km of450mmNB,Class600(10.2MPa)pipelinefromWaggatoCulcairnandcommissionedin 1998.Capacitylimitedbythe300mmNBYoungtoWaggapipeline. „ TheVictorianportionoftheInterconnectwasconstructedbyGasNet

  34. Slide 34: NSW Victoria Interconnect (cont)

    NSWVictoriaInterconnect(cont) 67 NSWVictoriaInterconnect(cont) 68

  35. Slide 35: Moomba Sydney Pipeline capacity upgrade

    MoombaSydneyPipelinecapacityupgrade TheMoombaSydneyPipelinecapacityupgradeismadeupofanumberofprojects: „ A5yearprogramofintegrityupgradestoallowtheoperatingpressureofthepipelinetobe increased– deliversincreasedthroughputandstoragecapacity. „ ConstructionofanewcompressorstationatMarsden – Existingcom

  36. Slide 36: East coast transmission operations

    Eastcoasttransmissionoperations „ EastCoastOperations „ YoungSiteVisit 71 Whatwedo:Transmission Manageandoperate „ APAGroupownedassetsacrossAustralia(1) „ Envestra(APA 30.2%)GasDistributionNetworksandpipelinesinSouthAustralia,Victoria, SouthernNSW,QueenslandandtheNorthernTerritory. „ EnergyInfrastru

  37. Slide 37: Operational overview – NSW operations

    Operationaloverview– NSWoperations „ ManageandoperatetheMoomba SydneyPipeline,includinglaterals „ ManagerandoperatetheEthane Pipelinewhichrunsinthesame easementastheMSPmainline „ MainbaseatYoung,whichincludes controlcentre „ MinorbasesatCobarandWilton „ Compressorsat: – YoungandCobar(mainline) – Cul

  38. Slide 38: Bulla Park Compressor Station

    BullaParkCompressorStation GasCompressor EthanePump Station Station FromMoomba ToSydney 75 Laterals Lateralsto: „ NorthernLateral (YoungtoOrange/Lithgow) „ SouthernLateral(Youngto Wagga/Griffith) „ CentralWest(Marsdento Dubbo) „ CentralRanges(Dubboto Tamworthandoperatedby Jemena) „ Interconnect(Wagg

  39. Slide 39: NSW – Victorian Interconnect

    NSW– VictorianInterconnect „ InterconnecttoVictoriais bidirectionalinflow „ CulcairnCompressor currentlycompressesgas fromSouthtoNorth „ APAoperationresponse toCulcairncanbefrom eitherVictoriaorNSW 77 Nationalaerialpatrol 78

  40. Slide 40: East coast gas security

    Eastcoastgassecurity „ Priorto1998therewerenoeastcoast interstatepipelineconnections PipelinescurrentlyAPAowned/operated Otherpipelines Gasproductionfacility „ TheNSWtoVictoriainterconnectionwas commissionedearlyinSeptember1998and providedemergencygastoVictoriaduringthe Longfordoutageofthatdate „ Th

  41. Slide 41: Young Control Centre

    YoungControlCentre „ Mainlinecompressor stationandlateral Ethane compressorstation Compressor Odourant Scraper Station Plant station „ Odourantfacility „ Gasscraperstation GasScraper „ Workshop station „ NSWGasControl room „ YoungHub YoungHub ControlRoom& „ Ethanescraper Workshop& Admin.Building Mai

  42. Slide 42: NSW SCADA system

    NSWSCADAsystem 83 VisittoYoungControlCentre „ Uponarrival – GotoAdministrationBuilding – Freshenup,teaandcoffee „ SafetyBriefing „ Sitetours– 3groupswillsimultaneouslyvisit/inspect – ControlRoom – MaintenanceFacilities – CompressionEquipment „ Intheeventofanemergencyalarm – Assemblypointisthemainfro

  43. Slide 43: Funding growth: investment criteria

    APA2010SiteVisit Fundinggrowth PeterFredricson ChiefFinancialOfficer 85 Investmentcriteria APArigorouslyassessesanypotentialinvestment/divestmentfrom astrategic,riskand economicandfundingviewpoint Strategic „ APAremainsfocusedongasandrelatedinfrastructuretodeliver valuetosecurityholders andinvestmen

  44. Slide 44: Capital management strategy

    Capitalmanagementstrategy „ ManagingAPA’sbalancesheettomaintainminimumBBB/Baa2investmentgradecredit ratingmetrics „ DRPandSPPequityfundingsupportsgrowthcapitalexpenditureandlowerlevelinvestment „ Significantcapitalinvestmentswillbesupportedwithequityto maintaininvestmentgrade ratingmetricsaspublicly

  45. Slide 45: Funding for FY10 growth capex

    FundingforFY10growthcapex(estimate) CapitalexpenditureforFY10 Organicgrowthprojects $110million BerwyndaleWallumbillaPipelineacquisition $83million HDFequityinterest(17%) $114million $307million Funds Freeoperatingcashflowretainedinthebusiness (OCFlessdistributionsandSIBcapex) $74million 24% Equityr

  46. Slide 46: Concluding remarks

    APA2010SiteVisit Concludingremarks MickMcCormack ManagingDirectorandCEO 91 Concludingremarks „ NaturalgasisprovidingmoreofAustralia’senergy – Useofnaturalgasisexpectedtomorethandoubleoverthenext 20years,withgasfired powergenerationakeygrowthdriver „ ByvirtueofitsportfolioAPAhasaccesstouniquegrowthop

  47. Slide 47: Celebrating a decade of delivering Australia's energy

    Celebratingadecadeof deliveringAustralia’senergy Forfurtherinformationcontact ChrisKotsaris InvestorRelations,APAGroup Tel:+61296930049 Email:[email protected] orvisitAPA’swebsite www.apa.com.au

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