APA GROUP — Capital/Financing Update 2012

Aug 8, 2012

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ASX RELEASE

9 August 2012

The Manager

ASX Market Announcements Australian Securities Exchange 4[th] Floor, 20 Bridge Street Sydney NSW 2000

Electronic Lodgement

Dear Sir or Madam

Company Announcement

I attach the following announcement for release to the market:

• APA to raise $350 million through ASX-listed notes

Yours sincerely

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Mark Knapman Company Secretary

ASX RELEASE

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9 August 2012

APA to raise $350 million through ASX-listed notes

APA Group (ASX:APA), Australia’s largest gas infrastructure business, has today lodged a prospectus with the Australian Securities and Investments Commission (ASIC) for an offer of long-dated, unsecured, subordinated, cumulative notes (Notes) to raise $350 million, with the ability to raise more or less (Offer).

The proceeds of the Offer will be used for general corporate purposes, supporting APA’s ongoing investment in the growth of its infrastructure assets, as well as the acquisition of Hastings Diversified Utilities Fund (HDF) if it proceeds. APA expects that these Notes will provide an amount of equity credit from Standard & Poor’s and Moody’s.

APA’s Chief Financial Officer, Mr Peter Fredricson said: “The Notes offer is part of APA’s ongoing capital management strategy, broadening our funding options for the considerable growth and investment opportunities that exist in our business. This includes organic growth investment in APA’s pipelines and related infrastructure, in the order of $300 million each year, as well as the possible acquisition of the HDF assets if our takeover is successful.

“With these Notes, our first offering in the retail market, APA’s existing Australian and New Zealand securityholders, as well as other local retail and institutional investors, are being provided an attractive opportunity to invest in a security that pays a fixed margin over a benchmark interest rate.”

Mr Fredricson added: “Our capital management strategy is unchanged. The Notes will be just one of funding sources that together ensure we maintain our stated preferred credit profile over the longer term.”

Key features of the Notes are described below. The Notes:

• are long-dated, unsecured, subordinated, cumulative notes to be issued by APT Pipelines Limited (the borrowing entity of the APA Group);

• will be guaranteed by Australian Pipeline Limited in its capacity as the responsible entity and trustee of Australian Pipeline Trust (APT) and APT Investment Trust (APTIT), which together effectively comprise the APA Group;

• have a Face Value and Issue Price of $100 per Note;

• have a First Call Date of 31 March 2018 with a final maturity on 30 September 2072;

• entitle holders to receive floating rate, cumulative interest payments quarterly in arrears, subject to deferral;

• pay interest calculated on a quarterly basis as the sum of the 90 day Bank Bill Rate plus the Margin;

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ASX RELEASE

9 August 2012

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• will have a Margin which will be determined following the Bookbuild and is expected to be in the range of 4.50% to 4.70%. This implies an initial yield of approximately 8.14% to 8.34% per annum[1] ;

• are intended to be quoted on the Australian Securities Exchange (ASX) under the code “AQHHA”; and

• are not convertible into stapled securities or any other securities.

Aquasia has been appointed Financial Adviser to APA Group and Macquarie Capital as Arranger and Joint Lead Manager to the Offer. Credit Suisse, Evans and Partners, Morgan Stanley, RBS and RBS Morgans have also been appointed as Joint Lead Managers. Forsyth Barr, First NZ Capital and Macquarie Capital New Zealand have been appointed as New Zealand Lead Managers.

The Offer comprises:

• an APA Securityholder offer being, an offer to Eligible APA Securityholders with a registered address in Australia or New Zealand;

• a Broker Firm Offer, being an offer to Australian and New Zealand resident retail clients of Syndicate Brokers;

• an Institutional Offer being, an offer to Institutional Investors who have been invited to bid for Notes in the Bookbuild; and

• a General Offer being, an offer to members of the general public who are resident in Australia and New Zealand.

Key dates for the Offer:

Key dates for the Offer:
Lodgement of Prospectus with ASIC	9 August 2012
Bookbuild to determine the Margin	16 August 2012
Announcement of the Margin and lodgement of Replacement Prospectus with ASIC	17 August 2012
Closing Date for the Securityholder Offer and General Offer	5:00pm (Sydney time) 10 September 2012
Closing Date for the Broker Firm Offer	10:00am (Sydney time) 17 September 2012
Issue Date	18 September 2012
Notes begin trading on ASX (on a deferred settlement basis)	19 September 2012
Holding Statements despatched by	21 September 2012
Notes begin trading on ASX (on a normal settlement basis)	24 September 2012

1 Based on an illustrative Bank Bill Rate of 3.64%.

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ASX RELEASE

9 August 2012

The key dates and times for the Offer are indicative only and may change without notice.

The Prospectus has been lodged with ASIC and the New Zealand Registrar of Financial Services Providers and is available for download within Australia and (after the Offer opens) New Zealand at www.apanotesoffer.com.au or by calling the APA Subordinated Notes Offer Information Line on 1800 992 312 (toll free within Australia) or +61 2 8280 7132 (callers outside Australia) (Monday to Friday – 8:30am to 5:30pm, Sydney time). A copy of the Prospectus has also been lodged with ASX.

A Replacement Prospectus, containing the determined Margin and Application Forms, will be made available from the Opening Date of the Offer, expected to be on 17 August 2012. Investors should consider the Prospectus in deciding whether to apply for Notes. Applications may be made using the Application Form attached to or accompanying the Replacement Prospectus, or online through the offer website at www.apanotesoffer.com.au.

Capitalised terms in this release have the meaning given to them in the Prospectus.

Attached is the broker presentation for the Offer.

For further information please contact:

Investor enquiries: Media enquiries: Chris Kotsaris David Symons Telephone: (02) 9693 0049 Telephone: (02) 9212 4666 Mob: 0402 060 508 Mob: 0410 559 184 Email: chris.kotsaris@apa.com.au Email: david@catocounsel.com.au

About APA Group (APA)

APA is Australia’s largest natural gas infrastructure business, owning and/or operating more than $8 billion of gas transmission and distribution assets. Its pipelines and assets span every state and territory on mainland Australia, delivering 50% of the nation’s gas usage. Unique amongst its peers, APA has direct management and operational control over its assets and the majority of its investments. APA also holds minority interests in energy infrastructure enterprises including Envestra, SEA Gas Pipeline, Hastings Diversified Utilities Fund and Energy Infrastructure Investments.

For more information visit APA’s website, www.apa.com.au

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APA Group Subordinated Notes

Peter Fredricson Chief Financial Officer Ian Duncan Group Treasurer 9 August 2012

Disclaimer

The information contained in this document (including this Disclaimer) or discussed at the presentation (collectively, the Presentation) has been prepared by APT Pipelines Limited (ABN 89 009 666 700) (the Issuer). The Issuer is a wholly owned subsidiary of Australian Pipelines Limited as the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) which together with APT Investment Trust (ARSN 115 585 441) forms APA Group. This presentation relates to the offer of APA Group Subordinated Notes (Notes) (Offer). The Offer is made pursuant to a prospectus under Part 6D.2 of the Corporations Act which was lodged with the Australian Securities and Investment Commission and the New Zealand Registrar of Financial Services Providers on 9 August 2012. The Issuer intends to lodge a Replacement Prospectus which will include the margin determined after the Bookbuild to be held on or about 17 August 2012(Replacement Prospectus).

Any decision by a person to apply for Notes should be made on the basis of the information contained in the Prospectus, not this Presentation. Applicants should read the Prospectus in its entirety before making a decision whether to apply for Notes. Applications for Notes may only be made on an application form that will be attached to or accompanying the Replacement Prospectus following the opening of the Offer, which is expected to occur on 17 August 2012. The Prospectus is available (and the Replacement Prospectus will be available) to Australian and (in the case of the Replacement Prospectus) New Zealand investors and eligible Australian and (in the case of the Replacement Prospectus) New Zealand holders of ordinary securities in the APA Group in electronic form at www.apagroup.com.au. Investment in Notes is subject to investment risk including possible loss of some or all principal invested. Please see Section 5 (Investment Risks) of the Prospectus for further details.

Not an offer - This Presentation is not a prospectus, product disclosure statement, disclosure document or other offer document under Australian law or under any other law. It does not, and is not intended to, constitute an offer for subscription, financial product advice, invitation, solicitation or recommendation by any person or to any person with respect to the purchase or sale of any securities or financial products in any jurisdiction and also does not form the basis of any contract or commitment to sell or apply for securities in the Issuer. This Presentation has not been lodged with ASIC.

Refer to the Prospectus - The information in this Presentation is an overview and does not contain all the information necessary to make an investment decision. It is intended to be a summary of certain information relating to the Issuer and its subsidiaries and does not purport to be a complete description of the APA Group or the Offer. It is provided for information purposes only and is subject to change without notice. You must not rely on this Presentation but make your own independent assessment whether to invest in Notes based on the information contained in the Prospectus and seek and rely upon your own independent taxation, legal, financial or other professional advice in relation to the information contained in this Prospectus.

New Zealand- This Presentation is provided in New Zealand only to selected wholesale investors whose business is the investment of money or persons who, in the course of and for the purpose of their business, habitually invest money for the purposes of the Securities Act 1978 (NZ) (“eligible investor”). If you are in New Zealand, in accepting this presentation you warrant that you are an eligible investor. You must not distribute this presentation to any person who is not an eligible investor.

U.S. restrictions - This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. This Presentation may not be distributed or released in the United States. Notes have not been, and will not be, registered under the U.S. Securities Act of 1933 (the U.S. Securities Act) or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons (as that term is defined in Regulation S of the U.S. Securities Act) except in accordance with an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws.

Not investment advice - The information contained in this Presentation has been prepared without taking account of any person's investment objectives, financial situation or particular needs and nothing contained in this Presentation constitutes investment, legal, tax or other advice.

Disclaimer - No representation or warranty, expressed or implied, is made as to the accuracy, adequacy or completeness of the information and opinions contained in this Presentation. This Presentation may contain certain forward looking statements, including estimates, projections and opinions (Forward Statements). Forward Statements may involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of the APA Group, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. No representation is made or will be made that any Forward Statements will be achieved or will prove to be correct. Actual future results and operations could vary materially from the Forward Statements. Similarly no representation is given that the assumptions upon which Forward Statements may be based are reasonable. Circumstances may change and the contents of this document may become outdated as a result. To the maximum extent permitted by law, the APA Group, any related bodies corporate, each of Credit Suisse Australia Limited, Evans and Partners Pty Limited, Macquarie Capital (Australia) Limited, Morgan Stanley Australia Limited, RBS Morgans Limited, RBS Equity Capital Markets (Australia) Limited (“JLM Group”) and their respective affiliates and the respective directors, officers, partners, employees, advisers and agents of each of them and any other person involved in the preparation of this Presentation disclaim all liability and responsibility (including, without limitation, any liability arising from fault or negligence) for any direct or indirect loss or damage which may arise or be suffered through use or reliance on anything contained in, or omitted from, this Presentation. Neither the APA Group or the JLM Group accept any responsibility or obligation to inform you of any matter arising or coming to their notice, after the date of the presentation or this document, which may affect any matter referred to in this Presentation. APTPL reserves the right to withdraw or vary the timetable for the Offer without notice.

Unless otherwise defined, capitalised terms in this Presentation have a consistent meaning with terms in the Prospectus.

Not for distribution in the United States of America

APA Group, 9 August 2012

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Summar y

About APA Grou p Financial information Ke features of Notes y Ke risks of Notes y Offer process

APA Group, 9 August 2012

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Offer summary

Issuer	APA Group via its borrowing entity APT Pipelines Limited (“APTPL”)
	₋ APA Group is Australia’s largest natural gas infrastructure business
	₋ S&P/ASX 100 company with a market capitalisation of $3.1 billion(1)
	₋ APTPL is a wholly owned subsidiary of Australian Pipeline Trust (“APT”)
Guarantee	The Notes are guaranteed on an unsecured and subordinated basis by APA Group’s responsible entity,
	Australian Pipelines Limited (“APL”) in its capacity as responsible entity of APT and APT Investment Trust
	(“APTIT”)(2)
Security	APA Group Subordinated Notes (“Notes”)
Offer Size	$350 million with the ability to raise more or less
Use of proceeds	General corporate purposes, supporting APA Group’s ongoing investment in the growth of its infrastructure
	assets, and the acquisition of Hastings Diversified Utilities Fund (HDF) if it proceeds
Equity credit	APA Group expects that Notes will provide an amount of equity credit from rating agencies
Offer structure	APA Securityholder Offer, Broker Firm Offer, Institutional Offer and General Offer
Bookbuild date	Expected to be 16 August 2012
JLMs	Credit Suisse, Evans & Partners, Macquarie Capital, Morgan Stanley, RBS and RBS Morgans
	First NZ Capital, Forsyth Barr and Macquarie Capital New Zealand as New Zealand Lead Managers
Listing	Notes are expected to be listed on ASX under the code “AQHHA”

Refer to Sections 1 and 6 of the Prospectus for further information about the Offer

(1) As at 8 August 2012

(2) Together APT, APTIT and APL and each of the entities controlled by APL comprise the APA Group

APA Group, 9 August 2012

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Notes summary

Security	APA Group Subordinated Notes (“Notes”)
Issue Price	A$100 per Note
Maturity Date	30 September 2072, unless redeemed earlier
First Call Date	31 March 2018
Interest	Floating rate, unfranked cash payments
payments	Payable quarterly in arrears, commencing on 31 December 2012, subject to deferral
Interest deferral	At the issuer’s discretion, subject to a distribution stopper
	Any deferred interest payments are cumulative and compounding
Margin	Expected range of 4.50% - 4.70% p.a., to be determined under the Bookbuild
	Equates to an initial yield of approximately 8.14% - 8.34%(1)
Change of control	Issuer redemption right
	If not redeemed by the Issuer, the Margin will increase by an additional 3.00% p.a.
Ranking	Notes are unsecured and rank ahead of APA Stapled Securities, equally with Equally Ranking Obligations and
	behind all other creditors and other classes of securities
Guarantee	The Notes are guaranteed on an unsecured and subordinated basis by APT and APTIT

Refer to Sections 2 and 5 of the Prospectus for further information about the Notes and key risks (1) Based on an illustrative 90 day Bank Bill Swap Rate of 3.64% as at 8 August 2012

APA Group, 9 August 2012

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APA overview

 Australia’s largest Largest Australian pipeline owner and operator, transporting half the nation’s natural gas usage natural gas  Operating and managing approximately $9 billion of energy infrastructure assets across mainland Australia, infrastructure including $4.7 billion assets on behalf of its energy investment partners: business

₋ 12,855 km gas transmission pipelines

₋ 25,000 km gas distribution mains and 1.1 million gas customer connections

• ₋ Related energy infrastructure including gas storage facilities, gas processing facilities, power generation and electricity interconnectors

• Dynamic business, expanding and enhancing its unique asset portfolio to capture the growth in demand for natural gas in Australia

 Currently over $400 million capital expenditure is committed to organic growth projects

• Strong financial  Consistent strong business performance, delivering growing cash flows and earnings principally derived from profile and regulated and contracted revenues

• performance  Diversified EBITDA by both asset and geography, with no single asset in its portfolio or single region contributing more than 25% of EBITDA

 Prudent capital management and robust financing capability Proven  Proven management team with track record of delivering securityholder value management  National team of 1,400 employees with operating expertise and extensive industry know how and operating expertise  Strategic development of its asset portfolio through organic growth and acquisitions, with assets owned and/or operated increasing from $1.4 billion in June 2000 to approximately $9 billion in June 2012

Refer to Sections 3, 5 and 8 of the Prospectus for further information about APA and key risks

APA Group, 9 August 2012

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Summar y About APA Grou p Financial information Ke features of Notes y Ke risks of Notes y Offer process

APA Group, 9 August 2012

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About APA Group

 APA is Australia’s largest natural gas infrastructure business

Australia’s largest natural gas pipeline owners

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DUET 1 , 480 km – 80 % Dampier Bunbury Pipeline
Singapore 1 , 800 km – Eastern Gas Pipeline , Queensland Gas Pipeline , Jemena pipelines
Power
HDF 2 , 445 km – Epic Energy pipelines
APA 12 , 855 km [( 1 ) ]
2 , 000 4 , 000 6 , 000 8 , 000 10 , 000 12 , 000 14 , 000 1 6 , 000
Pipeline length ( km )
( 1 ) Includes 100% of the pipelines operated by APA Group which form part of its energy APA energy investments
investments (excluding HDF) SEA Gas EII
Envestra HDF
Source: APA & AER State of the Energy Market 2011
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• Energy Infrastructure : primarily natural gas pipelines and interconnected gas storage facilities across Australia

• Asset Management : provision of asset management, operating and maintenance services to the majority of APA’s investments

• Energy Investments : minority interests in energy infrastructure businesses, including Envestra, SEA Gas, Hastings Diversified Utilities Fund, Energy Infrastructure Investments (I & II) and GDI

	APA Group (at 8 August	2012)
	Date listed	13 June 2000
	ASX symbol	APA
	Market capitalisation	A$3.1 billion
	Rank S&P/ASX 100	64th
	World Indices	MSCI; FTSE
	Securities on issue	644 million
	Fiscal year end	30 June

• APA generates predictable cash flows from contractual and regulatory arrangements across its asset base

• APA has direct management and operational control over the majority of its assets and investments

APA Group, 9 August 2012

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APA well positioned in a growing industry

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1,123 PJ
17,384 PJ
72,553 PJ
39,619 PJ
139
PJ
1,735 PJ
41
PJ
2,827 PJ
APA Group energy infrastructure assets
APA Group energy investments
HDF natural gas pipelines
Other natural gas pipelines 884 PJ 258 PJ 4,332 PJ
PJ Natural gas reserves (proved and probable)
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Source: APA data; Energy Quest February 2012

• Unrivalled gas asset footprint

• Largest transporter of natural gas across Australia[(1) ]

• Stable and predictable cash flow

• Regulated and contracted revenue

• Attractive growth opportunities

• Enhancing capacity in APA’s portfolio to meet increasing gas demand

• Integrated portfolio of assets

• Providing revenue and operating synergies

• Internally managed and operated business

• Highly skilled and experienced workforce

APA delivers half of Australia’s domestic gas usage

(1) APA’s 12,855 km of pipelines represents approximately two thirds of Australia’s gas transmission pipelines

APA Group, 9 August 2012

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Strategy for sustainable growth and security

• Enhancing APA’s portfolio of gas infrastructure assets in Australia’s growing energy market

• Abundant and growing gas reserves

• Increasing demand for natural gas, particularly for electricity generation

• Capturing revenue and operational synergies from APA’s significant asset base

• Facilitating the development of gas related projects that enhance APA’s energy infrastructure portfolio

• Pursuing opportunities that leverage APA’s knowledge and skills base

 Strengthening financial capability

Stable and predictable long-term cash flow underpinned by contractual or regulatory arrangements

APA Group, 9 August 2012

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Stable and predictable revenue

Pro-forma FY11 revenue split

• 99% of APA’s pro-forma FY11 revenue is derived from either price regulated or contracted assets

 Price regulated assets

• Tariffs on core services are set by regulation

• Retain ability to contract for services outside of the regulatory framework

• Staggered reset dates for APA’s regulated assets – access arrangements are generally set every 5 years

 Tariffs commercially negotiated for all other pipelines, new capacity on most pipelines and gas storage

• (1) Revenue from haulage contracts on price regulated assets. Contracts have set terms, including price for the life of the contract, and have limited exposure to regulatory decisions.

Other 1% Subject to price regulation 45% Light regulation or non price regulates assets 54% Contracted revenue(1) Regulated revenue	Other 1% Subject to price regulation 45% Light regulation or non price regulates assets 54% Contracted revenue(1) Regulated revenue	Other 1% Subject to price regulation 45% Light regulation or non price regulates assets 54% Contracted revenue(1) Regulated revenue
	Regulated a ssets	APA’s contracted assets
Term	Life of asset	Often in excess of 5 years Average contract term of 12 years
Counterparty credit	Broad population	For APA’s 4 major contracted assets, 85% of the contracted capacity is with investment grade counterparties
Volume risk	Assets exhibit little volume risk	More than 80% of revenue is capacity based (i.e. ‘take or pay’) therefore relatively unaffected by volume variability
Competition	Monopoly by definition	Some degree of competition

APA Group, 9 August 2012

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Developing profitable growth opportunities

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Developing opportunities that
enhance the value of APA’s
energy infrastructure portfolio
Emu Downs Further expansion of APA’s
wind farm pipelines to meet growing demand
acquisition for gas transportation and storage
services
Amadeus
Gas Pipeline
Goldfields Gas
acquisition
Pipeline expansions
Young Wagga lateral looping
Diamantina Power
Roma Brisbane Pipeline lateral Station development
Central Ranges
Berwyndale Wallumbilla
Pipeline
Pipeline acquisition
acquisition Mondarra Gas Storage
Mondarra Gas Storage Facility – initial works Facility expansion
Carpentaria Gas Pipeline expansion
Roma Brisbane
Goldfields Gas Pipeline expansion Pipeline expansion
Moomba Sydney Pipeline expansion – 5-year program
Victorian Transmission System expansion – Brooklyn Lara looping – northern augmentation – Sunbury looping
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 onwards
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Growth capital
expenditure
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Almost $1 billion of asset portfolio expansions over the last four years

APA Group, 9 August 2012

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Capital projects with predictable, long term returns

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Diamantina Power Station
Goldfields Gas Pipeline
Joint development of 242 MW
Capacity expansion –
gas-fired generation
compressor stations and
compressor upgrades
Mondarra Gas Storage
Roma Brisbane Pipeline
Facility
Capacity expansion
Capacity expansion
Moomba Sydney Pipeline
Mainline capacity expansion
APA energy infrastructure
Victorian Transmission System
APA investments Sunbury looping project
HDF natural gas pipelines Euroa compressor station
Other natural gas pipelines
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Growth projects totalling over $400 million announced or in progress

APA Group, 9 August 2012

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History of delivering consistent cash flows and earnings

Operating cash flow

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290
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300
250
200
150
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$ million
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Operating cash flow per security

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60
52.6
50
40
30
20
10
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
cents
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EBITDA
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492
500
400
300
200
100
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$ million
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Distribution per security

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34.4
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35
30
25
20
15
10
5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
cents
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APA Group, 9 August 2012

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Delivering on strategy - FY12 highlights

 Continued work on pipeline capacity expansion projects

• Roma Brisbane Pipeline

• Moomba Sydney Pipeline

• Victorian Transmission System

 Continued work on Mondarra gas storage expansion

 New capacity expansions announced

• Goldfields Gas Pipeline

 Gas-fired energy development for Mt Isa (joint venture with AGL)

• Long term electricity supply arrangements – Diamantina Power Station

• Long term gas supply contract – Carpentaria Gas Pipeline

 Sell down of APA Gas Network (Allgas)

• Takeover offer for HDF – Epic Energy pipelines

• Completed debt refinancing program – over $2 billion of new funds raised

• Responding to customer demands and developing tailored services

APA Group, 9 August 2012

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APA Group’s off-market takeover offer for HDF

 Rationale

• HDF Epic Energy pipelines form a natural fit with APA’s assets

• Enhanced gas transmission pipeline network – benefits securityholders (HDF and APA) and customers

 APA improved offer

• Improved takeover offer announced 9 August of $0.62 cash and 0.390 APA securities, with implied value of $2.51 per HDF security (based on APA security closing price on 8 August)

• ACCC clearance to proceed, on the basis of undertaking to divest HDF’s Moomba Adelaide Pipeline System

• Further reduction in conditionality of the bid

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Pilbara Pipeline
System
South West
Queensland
Pipeline
Moomba Adelaide
Pipeline System
APA energy infrastructure assets
APA energy investments
HDF gas transmission pipelines
Other gas pipelines
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• Offer open until 4 September 2012 unless extended

APA Group, 9 August 2012

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Summary

Focused on delivering sustained and profitable growth

 Optimising energy infrastructure portfolio

• Enhance, extend, protect or complement APA’s existing portfolio

• Expansions, acquisitions and new developments to meet increasing demand from customers for natural gas transportation and storage services

• Maximise long term growth

 Maintaining operations and earnings

• Revenue underpinned by long term contracts or regulatory arrangements

• Internal capability, managing and operating assets and investments and delivering on capital projects

• Balance sheet strength to fund growth and maintain credit profile

 Customer focused

• Developing responsive energy infrastructure and service solutions for customers

APA Group, 9 August 2012

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Summar y About APA Grou p Financial information Ke features of Notes y Ke risks of Notes y Offer process

APA Group, 9 August 2012

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Financial position and performance

A$ million	1H 2012	FY 2011
	APA Group pro - forma Pro - forma combined group (100%) Pro - forma combined group (50.1%)	APA Group pro - forma Pro - forma combined group (100%) Pro - forma combined group (50.1%)
Total Revenue	516.1 580.8 580.8	1,074.4 1,204.4 1,204.4
EBITDA	270.5 316.5 256.9	459.1 548.4 517.0
Profit Before Tax	104.7 93.6 40.0	159.8 176.5 157.3
Net Operating Cash Flow	156.5 184.0 186.8	285.5 347.3 349.2
Gearing ratio (%)	63.4% 62.5% 59.0%	62.4% 59.6% 58.4%
Interest Cover Ratio (times)	2.4x 2.2x 2.4x	2.2x 2.2x 2.2x

Refer to Section 4 of the Prospectus for further information

APA Group, 9 August 2012

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Capital management

• Cash and committed undrawn facilities of $1.0 billion[(1)]

• Equity raising through the Distribution Reinvestment Plan – $50 million in FY12

• $2.2 billion of new debt facilities raised in FY2012 as part of refinancing activities

• Refinanced $1.065 billion of debt maturing in FY 2012 and replaced $515 million of higher cost debt due to mature in FY 2014

• A$126 million raised in January 2012 – JPY 10 billion 6.5 year Medium Term Notes

• A$289 million raised in June 2012 – CAD 300 million 7 year Medium Term Notes

• Refinancing program focused on extending debt maturity, diversifying funding sources and reducing borrowing costs

• APA funding efficiently and cost effectively in volatile markets

(1) As at 8 August 2012

APA Group, 9 August 2012

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Debt maturity profile

Maturity profile of drawn debt[(1)]

$800m Headroom (bank borrowings) Bank borrowings US Private Placement $600m Australian MTN Japanese MTN Canadian MTN $400m $405m $475m $200m $414m $295m $289m $300m $296m $271m $113m $126m $0m FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25

(1) As at 8 August 2012

APA Group, 9 August 2012

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Summar y About APA Grou p Financial information Ke features of Notes y Ke risks of Notes y Offer process

APA Group, 9 August 2012

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Key features of Notes

Interest	Floating rate, unfranked cash payments
Payments	Payable quarterly in arrears, subject to deferral
	Any deferred interest payments are cumulative and compounding
	Calculated as 90 Day Bank Bill Rate + Margin
	Margin will be determined under the Bookbuild (expected range of 4.50% - 4.70% p.a.)
	Equates to an initial yield of approximately 8.14% - 8.34%(1)p.a.
First Call Date	The Issuer may redeem the Notes from 31 March 2018 and any interest payment date thereafter
Step - up	1.00% margin step-up on 31 March 2038
Maturity Date	30 September 2072, unless redeemed earlier
Change of	If a Change of Control Event occurs, the Issuer may redeem all Notes
control	If not redeemed by the Issuer, the Margin will increase by an additional 3.00% p.a.
Ranking	Notes rank ahead of APA Stapled Securities, equally with Equally Ranking Obligations and behind all other
	creditors and other classes of securities
Guarantee	The Notes are guaranteed on an unsecured and subordinated basis by APT and APTIT
Listing	Application will be made for the Notes to be quoted on ASX under the code “AQHHA”

Refer to Sections 1, 2 and 5 of the Prospectus for further information about the Notes and key risks (1) Based on an illustrative 90 day Bank Bill Swap Rate of 3.64% as at 8 August 2012

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Deferral of Interest

Overview	The issuer, may at its discretion, defer an Interest Payment (Optional Deferral)
	Any Deferred Interest Payments may be paid at any time
	Deferred Interest must be paid prior to or at Redemption
Distribution	If the issuer has elected to defer Interest Payments, the APA responsible entity must not
and Capital	₋ declare or pay any dividend, interest or distribution on Guarantor Equal Ranking Obligations or on APA Stapled
Stopper	Securities; or
	₋ redeem, reduce, cancel, purchase or buy-back any Guarantor Equal Ranking Obligations or APA Stapled
	Securities,
	until the date on which all Optionally Deferred Interest Payments have been paid in full.
Accumulation	Deferred Interest Payments are cumulative and compounding.

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Comparison of Notes with recent note issues

	APA Group	Caltex	AGL Energy	Origin Energy
	Subordinated Notes	Subordinated Notes	Subordinated Notes	Subordinated Notes
Offer size	~A$350 million	A$525 million(1)	A$650 million	A$900 million
Ranking	Subordinated	Subordinated	Subordinated	Subordinated
Maturity date	60 years (2072)	25 years (2034)	27 years (2039)	60 years (2071)
Scheduled call	Approximately year 5.5 and any	Year 5 and any interest	Year 7 and any interest	Year 5 and any interest
dates	interest payment date thereafter	payment date thereafter	payment date thereafter	payment date thereafter
Interest payment	Unfranked, floating rate, quarterly	Unfranked, floating rate,	Unfranked, floating rate,	Unfranked, floating rate,
	cash payments in arrears	quarterly cash payments	quarterly cash payments	quarterly cash payments
		in arrears	in arrears	in arrears
Initial margin	Expected range of 4.50 - 4.70%	4.50%	3.80%	4.00%
Interest step - up	1.00% at approximately year 25.5	0.25% at year 5	0.25% at year 7	1.00% at year 25
Optional interest	Yes	Yes	No	Yes
deferral
Mandatory	No	No	Yes	Yes
interest deferral
Change of control	Issuer call,	Issuer call, holder put	Issuer call, holder put	Issuer call,
	300bp step-up if not redeemed			500bp step-up linked to
				other listed securities

Information regarding Caltex Subordinated Notes, AGL Energy Subordinated Notes and Origin Energy Subordinated Notes is sourced from documents published by those issuers. APA Group takes no responsibility for that information and investors should read those documents for information regarding those securities. (1) Offer size exclusive of Shareholder Offer and General Offer which are currently being conducted

APA Group, 9 August 2012

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Summar y About APA Grou p Financial information Ke features of Notes y Ke risks of Notes y Offer process

APA Group, 9 August 2012

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Key risks associated with Notes

These and other risks associated with Notes, the market and APA Group are discussed in more detail in Section 5 of the Prospectus. All potential investors should review the risks outlined in the Prospectus and not rely on this presentation

Notes are	There may be a shortfall of funds to pay all amounts ranking senior to and equally with Notes or obligations under the
subordinated	Guarantee in an event of insolvency of APTPL and the winding up of APT or APTIT. This would result in Holders not receiving any
obligations	payment if claims ranking senior to Notes and Guarantee obligations were not satisfied in full, or otherwise not receiving a full
	return of any amounts due on the Notes but unpaid at that time.
Deferral of Interest	APTPL may defer Interest Payments at its discretion. Deferral is likely to have an adverse effect on the market price of Notes.
Payments	Deferral will also be disadvantageous to Holders from the perspective of the timing of cash flows.
Notes are long - dated	Notes will mature in 60 years on the Maturity Date. Although APTPL may redeem Notes in certain circumstances prior to such
	date, APTPL is under no obligation to do so.
APTPL may redeem	If redeemed early, the Redemption Amount may be less than the current market value of Notes at the time of redemption.
Notes under certain	Timing of redemption of Notes may be unfavourable having regard to a Holder’s individual financial circumstances or tax
circumstances	position.
Holders have no rights
to request an early	Holders have no right to request redemption of Notes prior to the Maturity Date.
redemption
No limitation on	The APA Group has a significant amount of prior ranking debt on issue at present.
issuing senior or equal ranking securities	APA Group is not restricted from issuing equal or further senior ranking securities or from incurring any such other debt obligations which may reduce the amount (if any) recoverable by Holders in an event of insolvency of APTPL or a winding up of
	APT and APTIT if it were to occur.
Changes in Interest	The Interest Rate is calculated by reference to the Bank Bill Rate, which is influenced by a number of factors and may fluctuate
Rate	over time.
	The Interest Rate may become less attractive compared to rates of return available on other securities or financial products.
Risks related to the	The market price of Notes may fluctuate and trade below the Issue Price due to various factors, including investor perceptions,
market generally	economic conditions, interest rates and credit spreads.
	Holders who wish to sell their Notes may be unable to do so at an acceptable price, if at all. The market for Notes may be less
	liquid than the market for APA Stapled Securities.

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Key risks associated with APA Group

These and other risks associated with Notes, the market and APA Group are discussed in more detail in Section 5 of the Prospectus. All potential investors should review the risks outlined in the Prospectus and not rely on this presentation

presentation
Economic	Approximately 45% of APA Group’s pro forma revenue for the 2011 financial year (excluding pass-through revenue) was earned
regulation	on assets subject to pricing regulation by independent national and state economic regulators. This proportion did not increase
	materially in the 2012 financial year.
	This pricing regulation provides for the regulator to determine the price and other terms for services. Costs could materially
	change within a regulatory pricing period for a particular asset resulting in adverse impacts on earnings for that asset and
	potentially indirectly affecting APTPL and the APA Responsible Entity’s ability to meet their respective payment obligations
	under the Notes and Guarantee.
	Changes to the regulatory framework may also adversely affect APA Group’s earnings and/or financial position and
	performance (and therefore potentially indirectly affect APTPL and the APA Responsible Entity’s ability to meet their respective
	payment obligations under the Notes and Guarantee). For example, the AEMC is currently considering proposals for changes to
	the National Gas Rules which, if adopted, may have an adverse revenue impact on APA Group’s regulated assets.
Bypass and	Bypass and competitive risk occurs when a new transmission pipeline offers gas transportation service to the same end market
competitive risk	serviced by existing pipelines. This risk is particularly applicable to the Moomba Sydney Pipeline and the Parmelia Gas Pipeline.
	APA Group’s future earnings could be reduced (and therefore potentially indirectly affect APTPL and the APA Responsible
	Entity’s ability to meet their respective payment obligations under the Notes and Guarantee) if customers purchased gas
	transportation services from new pipelines that bypass APA Group’s existing pipelines.
Gas demand risk	The volume of gas that is transported by APA Group is dependent on end user demand, which is dependent on a number of
	variables including the relative price of gas and its competitive position with other energy sources. If the demand for gas
	weakens, it may reduce the demand for future contracted pipeline capacity and adversely impact APA Group’s future revenue,
	profits and financial position (and therefore potentially indirectly affect APTPL and the APA Responsible Entity’s ability to meet
	their respective payment obligations under the Notes and Guarantee).

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Key risks associated with APA Group (cont.)

Operational risk	APA Group is exposed to a number of operational risks such as equipment failures or breakdowns, rupture of pipelines,
	information technology systems failures or breakdowns, employee or equipment shortages, contractor default or other
	unplanned interruptions. Operational disruption, or the cost of repairing or replacing damaged assets, could adversely impact
	APA Group’s earnings (and therefore potentially indirectly affect APTPL and the APA Responsible Entity’s ability to meet their
	respective payment obligations under the Notes and Guarantee).
Contract renewal	A large part of APA Group’s revenues are the subject of long term revenue contracts with end customers. Due to a range of
risk	factors including customer demand risk, gas supply risk, counterparty credit risk, bypass and competitive risk, APA Group may not be successful in recontracting the available pipeline capacity when it comes due for contract renewal. If APA Group is unable
	to recontract the available pipeline capacity when it comes due for renewal, it will adversely impact APA Group’s future
	revenue, profits and financial position (and therefore potentially indirectly affect APTPL and the APA Responsible Entity’s ability
	to meet their respective payment obligations under the Notes and Guarantee).
Construction and	APA Group’s capital expenditure on growth projects is expected to be significant. In certain circumstances, APA Group sets the
development risk	commercial terms with its customers based on expected capital expenditure costs. Should these costs exceed those estimates used in finalising commercial terms with customers, it may adversely impact APA Group’s future profits and financial position
	(and therefore potentially indirectly affect APTPL and the APA Responsible Entity’s ability to meet their respective payment
	obligations under the Notes and Guarantee).
HDF Offer risks	There is a risk that APA Group will not acquire the remaining securities in HDF at the end of the bid period under the HDF Offer.
	If you believe that a Combined Group would enhance APTPL’s or the APA Responsible Entity’s ability to meet its obligations
	under the Notes and/or Guarantee, you may consider this to be an adverse event.
	Should APA Group’s bid for HDF be successful, there is a risk that synergy benefits reasonably expected through the integration
	of APA Group and HDF may not be realised at all or not realised to their full extent, or that they may be realised over a longer
	period of time than anticipated.
	There is also a risk that implementation and other one-off costs may be substantial or greater than reasonably anticipated. This
	could have a material adverse impact on the Combined Group’s financial position and performance (and therefore potentially
	indirectly affect APTPL and the APA Responsible Entity’s ability to meet their respective payment obligations under the Notes
	and Guarantee).
	The ACCC has provided clearance for the proposed HDF Offer having accepted an undertaking from APA Group to divest the
	MAPS business. There are risks associated with the ACCC undertaking and the divestment of the MAPS business which could
	materially and adversely affect the APA Group’s and potentially HDF Group’s operations and/or financial position and
	performance.

APA Group, 9 August 2012

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Summar y About APA Grou p Financial information Ke features of Notes y Ke risks of Notes y Offer process

APA Group, 9 August 2012

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Offer structure

APA Securityholder For Eligible APA Securityholders resident in Australia and New Zealand Offer For Australian and New Zealand resident retail clients of Syndicate Brokers Broker Firm Offer who have received a firm allocation under the Bookbuild For institutional investors who have been invited to bid for Notes under the Institutional Offer Bookbuild General Offer For members of the general public resident in Australia and New Zealand

APA Group, 9 August 2012

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Key dates

Key dates for the Offer
Lodgement of prospectus with ASIC	9 August 2012
Bookbuild to determine the Margin	16 August 2012
Announcement of Margin and lodgement of replacement prospectus with ASIC	17 August 2012
Opening Date for the Offer	17 August 2012
Closing date for the Securityholder Offer and General Offer	5pm AEST on 10 September 2012
Closing Date for the Broker Firm Offer	10am AEST on 17 September 2012
Issue Date	18 September 2012
Notes begin trading on ASX (deferred settlement basis)	19 September 2012
Notes begin trading on ASX (normal settlement basis)	24 September 2012
All dates other than “lodgement of Prospectus with ASIC” are indicative and subject to change

Key Dates for Notes
First Interest Payment Date	31 December 2012
First Call date	31 March 2018
Step-up Date	31 March 2038
Maturity Date	30 September 2072

APA Group, 9 August 2012

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Key contacts

APA Group
Peter Fredricson	Chief Financial Officer	peter.fredricson@apa.com.au	(02) 9693 0008
Ian Duncan	Group Treasurer	ian.duncan@apa.com.au	(02) 9693 0074
Joint Lead Managers
Macquarie Capital	Cameron Duncan	cameron.duncan@macquarie.com	(02) 8232 7405
	Scott Favaloro	scott.favaloro@macquarie.com	(03) 9635 8072
Credit Suisse	Nick Schiffer	nicholas.schiffer@credit-suisse.com	(03) 9280 1771
	Will Farrant	will.farrant@credit-suisse.com	(02) 8205 4891
Evans & Partners	Damian Pretty	dpretty@eandp.com.au	(03) 9631 9801
	Mike Saba	msaba@eandp.com.au	(03) 9631 9813
Morgan Stanley	Bob Herbert	bob.hebert@morganstanley.com	(03) 9256 8937
	Patrick Mullins	patrick.mullins@morganstanley.com	(02) 9770 1151
RBS	Trent Skeers	trent.skeers@rbs.com	(02) 8259 6170
	David Pointon	david.pointon@rbs.com	(02) 8259 5782
RBS Morgans	Steven Wright	steven.wright@rbsmorgans.com	(07) 3334 4941
	Michael Johnston	michael.johnston@rbsmorgans.com	(02) 8215 5060
New Zealand Lead Managers
First NZ Capital	David Smith	david.smith@fnzc.co.nz	+64 4 474 4472
	Graeme Beckett	graeme.beckett@fnz.co.nz	+64 9 302 5545
Forsyth Barr	Shaun Roberts	shaun.roberts@forsythbarr.co.nz	+64 4 495 1329
	Jonathan Burke	jonathan.burke@forsythbarr.co.nz	+64 9 368 0030
Macquarie Capital (New Zealand)	Martin Wight	martin.wight@macquarie.com	+64 9 357 6961
Limited	Cameron Baudinet	cameron.baudinet@macquarie.com	+64 9 363 1432
Further information
APA Notes Offer Information Line	1800 992 312 (toll free	within Australia) or +61 2 8280 7132 (outside Australia)
APA Group Notes Offer website	www.apanotesoffer.com.au

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For further information visit APA’s website

Delivering Australia’s energy

www.apa.com.au