APA GROUP — Investor Presentation 2011

Jun 22, 2011

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ASX RELEASE

23 June 2011

The Manager

Company Announcements Office 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:

• Presentation - APA expands its energy infrastructure portfolio and announces $300 million capital raising

Yours sincerely

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Mark Knapman Company Secretary

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APA expands its infrastructure portfolio $300 million institutional equity raising

23 June 2011

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

Disclaimer

This investor presentation ( Presentation ) is issued by APA Group ( APA Group ), which comprises Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (of which Australian Pipeline Limited (ACN 091 344 704) is the responsible entity).

Summary information : This Presentation contains summary information about APA Group and their activities as at the date of this Presentation and should not be considered to be comprehensive or to comprise all the information which a securityholder or potential investor in APA Group may require in order to determine whether to deal in APA Group stapled securities. The information in this Presentation is a general background and does not purport to be complete. It should be read in conjunction with APA Group’s periodic reports and other continuous disclosure announcements released to the Australian Securities Exchange, which are available at www.asx.com.au.

Not financial product advice : This Presentation is for information purposes only and is not a product disclosure statement under Australian law, financial product or investment advice or a recommendation to acquire APA Group stapled securities (nor does it or will it form any part of any contract to acquire APA Group stapled securities). It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Cooling off rights do not apply to the acquisition of APA Group stapled securities.

Financial data : Unless otherwise stated, all dollar values are in Australian dollars (A$). The financial information included in this Presentation does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission.

Past performance : Past performance and pro forma historical financial information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. The historical information included in this Presentation is, or is based on, information that has previously been released to the market.

Future performance : This Presentation contains certain “forward-looking statements” or opinions. The words “expect”, “should”, “could”, “may”, “predict”, “plan”, “forecast”, “estimated” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings, distributions and financial position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements, including projections, forecasts, guidance on future earnings and estimates, are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements.

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Disclaimer (cont)

Investment risk : An investment in APA Group stapled securities is subject to investment and other known and unknown risks, some of which are beyond the control of APA Group. None of APA Group, any of its related bodies corporate or any other person or organisation guarantees any particular rate of return or the performance of APA Group, nor do any of them guarantee the repayment of capital from APA Group or any particular tax treatment.

Not an offer : This Presentation is not and should not be considered an offer or an invitation to acquire APA Group stapled securities or any other financial products and does not and will not form any part of any contract for the acquisition of APA Group securities. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any ‘U.S. person’ (as defined in Regulation S under the US Securities Act of 1933, as amended ( Securities Act )) ( U.S. Person ). APA Group stapled securities have not been, and will not be, registered under the 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 any U.S. Person absent registration except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any other applicable securities laws.

Lead Manager and advisers : RBS Equity Capital Markets (Australia) Limited ( Lead Manager ) and APA Group’s other advisers have not authorised, permitted or caused the issue, lodgement, submission, dispatch or provision of this Presentation and do not make or purport to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by the Lead Manager and advisers.

Disclaimer of liability : APA Group, its advisers and the Lead Manager and their respective affiliates, officers and employees, to the maximum extent permitted by law, expressly disclaim all liabilities (including for negligence) in respect of, make no representations regarding, and take no responsibility for, any part of this Presentation and make no representation or warranty as to the currency, accuracy, reliability or completeness of information.

Non-GAAP measures: Investors should be aware that certain financial data included in this Presentation are “non-GAAP financial measures” under Regulation G of the U.S. Securities Exchange Act of 1934. These measures include VWAP and EBITDA. The disclosure of such non-GAAP financial measures in the manner included in the Presentation may not be permissible in a registration statement under the Securities Act. These non-GAAP financial measures do not have a standardized meaning prescribed by Australian Accounting Standards and therefore may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. Although APA Group believes these non-GAAP financial measures provide useful information to users in measuring the financial performance and condition of the business, investors are cautioned not to place undue reliance on any non-GAAP financial measures included in this Presentation.

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Equity raising overview

Offer size	$300 million institutional placement Approximately 78 million new APA securities (14% of issued capital)
Securities	New securities not entitled to FY11 final distribution but otherwise rank equally with existing APA securities
Issue price	Fixed price of $3.85 per security, representing – 8.1% discount to the adjusted last closing price(1)($4.19) – 7.5% discount to the adjusted 5 day VWAP(1)($4.16)
Use of proceeds	Acquisition: Emu Downs wind farm and development site (“Emu Downs”) Organic growth until end of FY12: Gas pipeline and storage expansion in Queensland, New South Wales, Victoria, Western Australia and Northern Territory
Financial impact	Gearing reduces from 70.1% (1H11) to an estimated 67%(2,3) FY2011 guidance maintained (as at 1H11 result announcement)(3) Acquisition of Emu Downs is operating cash flow per security accretive in FY12
Key dates	Bookbuild opens on Thursday 23 June and closes Friday 24 June Settlement on Wednesday 29 June Allotment and trading of new securities commences on Thursday 30 June
PETRONAS participation	PETRONAShas indicated it will subscribe for its 17.55% pro-rata interest in the placement

• (1) Adjusted for the estimated FY2011 final distribution of 17.9 cents per security, which the new securities are not entitled to.

• (2) Estimated gearing (ratio of net debt to net debt plus book equity) as at 30 June 2011 adjusted for the impact of the equity raising and acquisition of Emu Downs, assuming financial close of the Emu Downs acquisition occurs by 30 June 2011 (financial close expected early July 2011)

• (3) FY11 financial performance is preliminary in nature, subject to finalisation within APA Group and review by external auditors

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APA well positioned in a growing industry

• Unrivalled gas asset footprint

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

• Stable and secure cash flow

• Regulated & contracted revenue

• Attractive growth opportunities

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

• Integrated portfolio of assets

• Providing revenue & operating synergies

• Internally managed and operated business

• Highly skilled & experienced workforce

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2,456 PJ
68,889PJ
32,551 PJ
141
PJ
1,315 PJ
33
PJ
2,881 PJ
APA pipelines and networks
APA investments
Other pipelines
891 275
PJ Gas reserves (proved and probable) PJ 4,571 PJ
1,067 PJ
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Source: APA data; Energy Quest February 2011
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• (1) APA’s 12,700 km of pipelines represents 65% of Australia’s gas transmission pipelines

APA’s national portfolio connects major gas sources to major markets

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11-year history of delivering value & growth

Total securityholder returns since listing

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600
APA total securityholder returns
16.5% p.a. CAGR
S&P/ASX 200 accumulation index
500
S&P/ASX 200 Utilities accumulation index
400
300
200
100
0
Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11
Source: APA based on IRESS data
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Indexed to 100 from 13 June 2000 (listing) to 22 June 2011

Note: APA’s historical financial performance (including security price performance) cannot be relied upon as an indicator of future performance

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Strategy for sustainable, profitable growth

Continue to maximise value for APA’s investors

Secure long-term cash flow underpinned by contractual or regulatory arrangements

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

• Abundant domestic gas reserves

• Increasing demand for natural gas, in particular for power generation

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

• Leveraging APA’s gas infrastructure portfolio to develop related projects

– Encouraging the development of gas generation on or near APA’s assets

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

• Delivering energy solutions for customers

• Strengthening financial capability

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Use of proceeds

Emu Downs acquisition - wind farm and development site ($171 million)

80 MW operating wind farm in Western Australia, and 130 MW development rights for an adjacent site Financial close by early July 2011 Secure revenue, with long term PPA contracts for electricity and Renewable Energy Certificates – total output contracted to Dec 2030 Operating and maintenance contracts with warranted availability(1)

Organic expansion of APA’s energy infrastructure (approximately $300 million)

Mondarra Gas Storage Facility expansion, WA Amadeus Gas Pipeline acquisition, NT Roma Brisbane Pipeline expansion, Qld Moomba Sydney Pipeline mainline expansion, NSW Victorian Transmission System northern augmentation project and pipeline looping (Melbourne western outer ring main), Vic Queensland Gas Network extension Secure revenue – expansions are underpinned by long term contracts or as approved under regulatory arrangements

• (1) Under the Vestas agreement Emu Downs Wind Farm has a warranted 97% annual availability. Liquidated damages are payable by Vestas for a failure to meet the annual 97% availability warranty.

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Sources and use of proceeds

Committed/expected capital expenditure	Committed/expected capital expenditure	Committed/expected capital expenditure	Funding sources (estimate)	Funding sources (estimate)
Energy infrastructure acquisitions Emu Downs Acquisition costs $171 million $ 9 million(1) $180 million Organic expansion of APA’s gas infrastructure(2) Mondarra Gas Storage Facility $ 70 million(3) Amadeus Gas Pipeline $ 63 million Roma Brisbane Pipeline $ 50 million Other gas infrastructure $117 million $300 million			Equity raising proceeds: Institutional placement DRP(4)	$300 million $ 50 million $350 million 73%
Organic expansion of APA’s gas Mondarra Gas Storage Facility Amadeus Gas Pipeline Roma Brisbane Pipeline Other gas infrastructure			Cash: Retained in the business(5)	$100 million 21%
			Debt: From existing debt facilities	$ 30 million 6%
	$480 million			$480 million

(1) Transaction costs of $0.5 million and stamp duty of $8.1 million.

(2) Estimate based on forecast aggregate capital expenditure to June 2012 on energy infrastructure expansions detailed on slide 13.

(3) Represents estimated capital expenditure to June 2012, with further $70 million capital expenditure forecast for FY13.

(4) DRP for FY11 interim distribution ($18 million) and estimate for DRP in respect of FY11 final distribution and FY12 interim distribution.

(5) Estimate of operating cash flow less projected distributions and projected non-discretionary capital expenditure for 18 months to June 2012.

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Emu Downs

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SWIS HV
electricity
transmission
line
130 MW
development
Parmelia
site
Gas
Pipeline
Emu Downs
Existing
80 MW
wind farm
10 km
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 Acquisition price of $171 million[(1) ]

• Represents FY12 EBITDA multiple of approx. 8.5 times

• Represents a multiple of approx. $2.2 million per installed MW

• Operating cash flow per security accretive in FY12

• Price includes the development rights for the 130 MW wind farm development on an adjacent site

 Secure earnings – fully underwritten

• Long term revenue contracts (20 years) with creditworthy counterparties for the off-take of all electricity and RECs produced from the existing wind farm

• No commodity pricing risk – electricity and REC pricing fixed for the contract term

	Emu Downs existing wind farm	Emu Downs existing wind farm
	Location	200 km north of Perth, Western Australia
	Capacity	79.2 MW – 48 Vestas turbines x 1.65 MW
	Capacity	37% - average based on almost 5
	factor(2)	years operating data
	Operation	Operating since October 2006

• Well understood and predictable wind resource – 10 year wind dataset

 Operations de-risked

• Wind farm capacity availability warranty above 97%: comprehensive operation and maintenance service with Vestas to 2013 (plus 5 year extension)

(1) Acquisition price excludes transaction costs and stamp duty, and subject to final minor settlement adjustments

(2) Capacity factor is the ratio of actual yield to the maximum output of the wind farm. Capacity factor includes the warranted availability of at least 97%

• Not for distribution or release in the United States or to U.S. persons

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Energy solutions for customers

• The acquisition enhances existing APA assets, with delivery of total energy solutions for customers

• Emu Downs is located close to APA’s Parmelia Gas Pipeline and associated Mondarra Gas Storage Facility

• Wind generation together with gas fired electricity generation provides clean electricity to match demand

• The variability in wind generation production requires gas peaking generation to match consumption

• Provides an opportunity for gas-fired peaking generation to be developed nearby and use APA’s gas pipeline and gas storage facility

• Accessing existing electricity infrastructure

• With proposed expansion of transmission line capacity

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Geraldton
Mondarra Gas
Storage Facility
Wind generation
Emu Downs
supported by
Wind Farm Parmelia gas fired generation
Gas Pipeline
Well supported region for
developing further power
generation infrastructure
APA natural gas pipeline
APA gas storage facility
APA power generation
Muchea
Other power generation
132 kV electricity transmission line
Proposed 330 kV electricity transmission line
To Perth
0 25 50
kilometres
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Source: APA, Western Power (Mid West Energy Project)

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A strategic acquisition

• Strategic objectives Why Emu Downs?  Well located to complement and enhance APA’s existing assets – the Parmelia

• Leveraging APA’s Gas Pipeline and Mondarra Gas Storage Facility

• gas infrastructure  APA’s gas pipeline and/or storage services provide infrastructure for “back-up”

• portfolio to develop gas fired generation that may be developed near Emu Downs

• related projects and  APA is able to facilitate infrastructure development to deliver a packaged capture synergies solution for firm electricity capacity  Fully contracted revenue (both electricity and RECs output) with creditworthy counterparties for the remaining operating life of the asset (20 years)

• Stable and predictable cash flows with high visibility – fixed price for electricity

• Enhancing APA’s and RECs

• asset portfolio and  Strong operating track record – established wind farm with a large wind dataset

• strengthening and almost 5 years of operating history

• financial capability  Adjacent wind farm development site with approvals to construct and operate a further 130 MW

• Acquisition is operating cash flow per security accretive in FY12  Further enhances APA’s wind farm experience and skills which will benefit

• Leveraging APA’s future strategic initiatives[(1) ]

• knowledge and  Using APA’s understanding of the energy market to deliver value energy

• skills base solutions

• (1) APA has a 20% interest in the132 MW North Brown Hill wind farm in South Australia, through its investment in EII2. APA manages the investment on behalf of EII2 partners.

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Committed or planned capital projects

Amadeus Gas Pipeline

Buy-out of the residual position of the lease (2011)

Roma Brisbane Pipeline Capacity expansion (2011-2012)

Mondarra Gas Storage Facility

Expanding storage capacity and capability Interconnection with adjacent pipeline (2011-2012)

APA pipelines and networks APA investments Other natural gas pipelines

Victorian Transmission System

Sunbury looping project (2012)

APA Gas Network

Expansion into new housing areas (ongoing)

Moomba Sydney Pipeline Mainline capacity expansion (2009-2013)

Victorian Transmission System Northern section augmentation (2010-2012)

Expanding APA’s gas infrastructure portfolio

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Financial impact

Post equity raising and acquisition

• Gearing reduces from 70.1% (1H11) to an estimated 67%[(1)]

• Capital raising strengthens APA’s credit metrics and further underpins investment grade credit ratings from Standard & Poor’s (BBB) and Moody’s (Baa2)

• FY11 guidance maintained as provided at 1H11 results announcement:

• EBITDA: Towards the upper end of the range of $480 million to $490 million[(2) ]

• Interest costs: Towards the upper end of the range of $240 million to $245 million

• FY11 final distribution: Confirmed estimate of 17.9 cents per security

  • New securities issued under the institutional placement will not be entitled to this distribution

• FY11 financial performance is preliminary in nature, subject to finalisation within APA and review by external auditors

• (1) Estimated gearing (ratio of net debt to net debt plus book equity) as at 30 June 2011 adjusted for the impact of the equity raising and acquisition of Emu Downs, assuming financial close of the Emu Downs acquisition occurs by 30 June 2011 (financial close expected early July 2011)

• (2) Inclusive of the EII2 once-off equity accounted adjustment and the $9 million in costs associated with the Emu Downs acquisition.

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Summary

• APA is Australia’s largest natural gas infrastructure business, owning and/or operating 12,700 km gas pipelines across Australia

• Successful history of delivering value and growth

• Total securityholder return CAGR of 16.5% per annum since listing in 2000

• APA is developing and enhancing its energy infrastructure portfolio to meet the demands of a growing domestic energy market

Emu Downs acquisition

• Secure long term revenue underpinned by contracts with credit worthy counterparties

• Operating cash flow per security accretive in first full year of ownership

• Opportunity to leverage APA’s existing gas infrastructure assets in Western Australia

Organic expansion of existing portfolio

• Secure long term revenue underpinned by contractual or regulatory arrangements

• Expanding APA’s infrastructure across the country in line with customer requirements

 Capital raising strengthens APA’s credit metrics

• Underpins investment grade credit ratings from Standard and Poor’s (BBB) and Moody’s (Baa2)

 Guidance maintained for FY11

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Supplementary information

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APA asset and investment portfolio

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20
17
23 20 NORTHERN
TERRITORY 20
QUEENSLAND
2
18
WESTERN 18
12 AUSTRALIA
23 4 20
1 18
13
SOUTH 20 3
15 AUSTRALIA NEW SOUTH 20
24 23 5 WALES
14 16 21
18 6 7
22
18
20
18 8
19 9
18
APA assets 11 VICTORIA
10
APA investments
HDF pipelines
TASMANIA
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APA Group assets and investments

Gas transmission and distribution

Asset Management

Commercial and/or operational services to:

• Energy Infrastructure Investments - Envestra Limited

Queensland

• (1) Roma Brisbane Pipeline

• Ethane Pipeline Income Fund

• (2) Carpentaria Gas Pipeline

• SEA Gas Pipeline

• (3) APA Gas Network

• EII2

• (4) Berwyndale to Wallumbilla

• other third parties

New South Wales

• (5) Moomba Sydney Pipeline

• (6) Central West Pipeline

Energy investments

• (7) Central Ranges Pipeline

• (8) NSW interconnect with Victoria

(18) Envestra Limited (33.0%)

• Gas distribution networks and pipelines (SA, Vic, Qld, NSW & NT)

Victoria

• (9) Victorian Transmission System

• (10) Dandenong LNG facility

(19) SEA Gas Pipeline (50%)

South Australia

(20) Energy Infrastructure Investments (19.9%) Annuity gas pipelines, electricity transmission, small gas-fired power stations and gas processing plants

(11) SESA Pipeline

Western Australia

• (12) Goldfields Gas Pipeline (88.2%) (13) Mid West Pipeline (50%)

• (21) Ethane Pipeline Income Fund (6%)

• (14) Parmelia Pipeline

• (15) Mondarra Gas Storage

(22) North Brown Hill wind farm (20.2%)

(16) Kalgoorlie Kambalda

(23) Hastings Diversified Utilities Fund (19.4%)

Northern Territory (17) Amadeus Gas Pipeline

(24) Emu Downs Wind Farm

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FY11 interim result summary

• Consistent financial performance

• Increasing key financial measures

• Maintaining cash flow stability and revenue certainty

• Managing environment of higher borrowing costs

• Upgraded FY2011 EBITDA guidance

• Towards upper end of a range of $480 million to $490 million

		1H11
	Operating cash flow	$170 million	up6%
	Revenue excluding pass-through	$370 million	up8%
	EBITDA	$264 million	up8%
	Profit	$70 million	up10%
	Operating cash flow per security	31.0 cents	down2%
	Distribution per security	16.5 cents	up5%
	Net tangible asset per security	$1.34	up9%

(versus range of $465 million to $485 million communicated at FY2010 results)

 Enhancing APA’s gas infrastructure portfolio

• Continued expansion of gas infrastructure assets, including Moomba Sydney Pipeline, Young Wagga pipeline looping, and Victorian Transmission System

• Facilitating gas fired power generation on the Carpentaria Gas Pipeline

 Quality APA people and portfolio

• In-house skills developing the unique growth opportunities available to APA

• Safety and security of assets – minimal impact from weather events

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For further information contact

Chris Kotsaris Investor Relations, APA Group Tel: +61 2 9693 0049 E-mail: chris.kotsaris@apa.com.au

Delivering Australia’s energy

or visit APA’s website

www.apa.com.au

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