APA GROUP — Investor Presentation 2012

May 1, 2012

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ASX RELEASE

2 May 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:

• Presentation – Growth over the long term

Yours sincerely

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Mark Knapman Company Secretary

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Growth over the long term

Ross Gersbach Chief Executive Strategy and Development

Macquarie Australia Conference 2 May 2012

Disclaimer

This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) ( APA Group ).

Summary information: This presentation contains summary information about APA Group and its activities current as at the date of this presentation. The information in this presentation is of a general background nature and does not purport to be complete. It should be read in conjunction with the APA Group’s other periodic and continuous disclosure announcements which are available at www.apa.com.au.

Not financial product advice: Please note that Australian Pipeline Limited is not licensed to provide financial product advice in relation to securities in the APA Group. This presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire APA Group securities and 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 consult an investment adviser if necessary.

Past performance: Past performance 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.

Future performance: This presentation contains certain “forward‐looking statements” such as indications of, and guidance on, future earnings and financial position and performance. 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.

This presentation contains such statements that are subject to risk factors associated with the industries in which APA Group operates which may materially impact on future performance. Investors should form their own views as to these matters and any assumptions on which any forward‐looking statements are based. APA Group assumes no obligation to update or revise such information to reflect any change in expectations or assumptions.

Investment risk: An investment in securities in APA Group is subject to investment and other known and unknown risks, some of which are beyond the control of APA Group. APA Group does not guarantee any particular rate of return or the performance of APA Group.

Not an offer: This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security.

APA: Macquarie Australia Conference, May 2012

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APA – well positioned in a growing industry

Australia’s largest natural gas pipeline owners

 Unrivalled gas asset footprint

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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
Pipeline length (km)
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• Largest transporter of natural gas across Australia

• Integrated portfolio of assets

• Providing revenue and operating synergies

 Increasing gas supply

• Australian 2P conventional and unconventional gas reserves exceed 140,000 PJ[(1)]

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(1) Includes 100% of the pipelines operated by APA Group which form part of its APA energy investments
energy investments (excluding HDF) SEA GasEnvestra HDFEII
Source: APA & AER State of the Energy Market 2011
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 Increasing gas demand

• Forecast to almost double by 2030 to 2,565 PJ[(2)] with gas fired electricity generation a key growth driver

 Internally managed and operated business

• Highly skilled and experienced workforce, with internal capability to expand and integrate portfolio

• Attractive growth opportunities

• Expanding and enhancing asset portfolio to meet increasing gas demand

• (1) EnergyQuest February 2012

• (2) Australian Energy Resource Assessment, July 2010

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Australian gas consumption
3,000
2,565 PJ
2,000
1,000
1970 1980 1990 2000 2010 2020 2030
Source: Australian Energy Resource Assessment, July 2010
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APA: Macquarie Australia Conference, May 2012

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Developing profitable growth opportunities

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Growth capital
expenditure 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
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FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 onwards
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Almost $1 billion of asset portfolio expansions over the last four years

APA: Macquarie Australia Conference, May 2012

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APA’s value creating growth

 Core business growth – optimal gas delivery

– Pipeline portfolio extensions – maximising ‘gas source to market’ connections

– Pipeline expansions – matching demand with capacity efficiently

• Gas storage – balancing supply and demand

• Further growth – optimal asset use

• Energy investments – leveraging internal smarts and capability

– Energy developments (power generation) – leveraging existing infrastructure

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APA: Macquarie Australia Conference, May 2012

Core growth – pipeline portfolio extension

Extending APA’s natural gas pipeline portfolio to optimise connections between gas sources to markets of energy users

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• Pipeline developments

– 2008: Bonaparte (NT)

• Pipeline acquisitions

• 2004: Parmelia (WA)

• 2006: Gasnet (Vic, WA)

• 2007: SEA Gas (Vic‐SA)

• 2008: Central Ranges (NSW)

• 2009: Berwyndale (Qld)

• 2011: Amadeus (NT)

• 2012: Epic Energy? (Qld, SA, WA)

• APA has extended its pipeline network from 7,000 km to 13,000 km[(1)] since 2004

• (1) Includes pipelines partially owned and operated by APA

APA: Macquarie Australia Conference, May 2012

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Core growth – pipeline expansions

Incremental expansion of pipeline capacity to match demand … a cost efficient approach

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 Process

• Understanding customer and market requirements for pipeline service – throughput, peak, pressure, storage, flexibility etc.

• Test existing infrastructure capacity to meet requirements

• Design optimal, cost efficient incremental expansion

Wollert compressor station, Vic

• Determine commercial arrangements

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 Means of increasing capacity

• Alter existing operating parameters

• Compressor upgrades – increased compressor power at existing compressor stations

• Additional compressor stations

• Looping part or all of an existing pipeline

Young Wagga looping project, NSW

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APA: Macquarie Australia Conference, May 2012

Core growth – pipeline expansions

Past and current pipeline expansions are underpinned by contractual or regulatory arrangements, generating secure, long term returns

Goldfields Gas Pipeline

3 new compressor stations and compressor upgrades

$150m compressor upgrades and new inlet compressor station – capacity available 2014

Carpentaria Gas Pipeline New compressor station

Roma Brisbane Pipeline Operating pressure upgrade, compressor upgrades and pipeline looping

$50m pressure and compressor upgrade and metro looping – capacity available 2012

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APA energy infrastructure

APA investments

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Other natural gas pipelines

Total capacity expansions

Currentl expansion projects and capacity availability

Victorian Transmission System

Operating pressure upgrade, compressor upgrade, 2 new compressor stations, pipeline looping and bidirectional flow capability

Moomba Sydney Pipeline Operating pressure upgrade, compressor upgrade, new compressor station and pipeline looping

$100m (5 year) pressure upgrade and inlet compressor upgrade

– capacity available

Access arrangement approved compressor station and pipeline looping – capacity available 2012

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APA: Macquarie Australia Conference, May 2012

Core growth – gas storage

Interconnected gas storage provides for supply and demand balancing, as well as supply security

 APA’s gas storage infrastructure

• Mondarra Gas Storage Facility (Western Australia) – underground gas storage (depleted gas reservoir) connected to Parmelia Gas Pipeline (APA) and Dampier Bunbury Pipeline

• LNG storage facility (Victoria) – LNG bullet connected to the Victorian Transmission System

• Line pack (pipeline) storage – existing infrastructure

• APA is developing both infrastructure and services offering to meet customers’ unique storage requirements

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Mondarra Gas Storage Facility, WA

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Dandenong LNG Storage Facility, Vic

APA: Macquarie Australia Conference, May 2012

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Mondarra Gas Storage Facility expansion

Drivers for expansion

• Increasing demand for gas storage services for downstream Western Australian market

• Power generation and peak gas supply

• Recent gas supply interruptions highlighted vulnerability of supply

• Gas storage capacity will mitigate potential future interruptions

• Anticipated demand from gas users for temporary storage services

• Market arbitrage / users operations changes / gas portfolio management

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MONDARRA
GAS STORAGE
PARMELIA FACILITY
PIPELINE
PERTH
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APA: Macquarie Australia Conference, May 2012

Further growth – energy investments

APA’s energy investments leverage internal capability, both people and systems

• Minority equity stakes in secure, relatively low growth energy infrastructure assets and businesses, together with

Long term operating agreements – mix of asset management, operations and maintenance and corporate functions

 Benefits include

• Invest capital in higher growth assets

• Receive asset return plus management fee

• Long term security – revenue, operations and partnerships

 APA created energy investments

• 2008: Energy Infrastructure Investments (APA 19.9%)

• 2009: EII2 (APA 20.2%)

• 2011: GDI (EII) ‐ Sale of 80% of APA Gas Network (Allgas) (APA 20.0%)

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APA: Macquarie Australia Conference, May 2012

Further growth – energy developments

Developing energy infrastructure that leverages APA’s existing infrastructure

• Power generation that enhances or protect APA’s infrastructure

• Providing customers with a suite of services

• Maintaining APA’s risk profile – long term secure revenue contracts

• Recent acquisitions and current projects

• 2011: Emu Downs wind farm

• 2012‐2013: Diamantina Power Station

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APA: Macquarie Australia Conference, May 2012

Emu Downs wind farm

• Acquired at attractive multiples

• FY12 EBITDA multiple of approx. 8.5 times

• Includes 130 MW wind farm development rights on an adjacent site

• Delivering secure earnings

• Long term revenue contracts for black and green products from the existing wind farm

• No commodity price risk

• Well understood and predictable wind resource – 5 year operating dataset and 10 year wind dataset

• Long term O&M agreement with capacity availability warranty above 97%

• (1) 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%

Emu Downs wind farm
Location	200 km north of Perth, Western Australia
Capacity	79.2 MW – 48 Vestas turbines x 1.65 MW Development right for a further 130 MW on adjacent site
Capacity factor(1)	37% ‐ average based on almost 5 years operating data
Operation	Operating since October 2006

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APA: Macquarie Australia Conference, May 2012

Providing total energy solution

• Wind generation and gas fired generation linkage

• Variability in wind generation production supplemented with gas peaking generation

• Essential in Western Australian market

• Provides an opportunity for gas‐fired peaking generation to be developed

• Located adjacent to APA assets

• Wind farm and potential new gas‐fired generation near APA’s gas pipeline and gas storage facility (Parmelia Gas Pipeline and Mondarra Gas Storage Facility)

• Access to existing electricity infrastructure

• Proposed expansion of transmission line capacity accommodates new generation

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Source: APA, Western Power (Mid West Energy Project)

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APA: Macquarie Australia Conference, May 2012

Diamantina Power Station – a win‐win solution

An APA and AGL Energy power generation development to supply energy users in Mt Isa and surrounding regions

 Energy efficient

• 242 MW combined cycle plant, with high energy efficiency of 55% (compared with 35% for coal fired)

• Local generation, with no transmission losses

 Cost efficient

• Use existing gas and electricity transmission infrastructure

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• Ideally suited to expand in line with regional growth

• Significantly lower cost and lower carbon impact than state grid alternative

 Enhancing APA’s portfolio

• Secures future value for Carpentaria Gas Pipeline

• long term gas transportation agreement

• Attractive returns from Diamantina Power Station

• long term electricity supply agreement

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APA: Macquarie Australia Conference, May 2012

Investment considerations and criteria

 Strategic – core asset versus leverage opportunity

• Ownership percentage depends on the strategic nature of the asset and the ability to extract synergies with APA’s asset footprint

 Economic – returns appropriate to risk

• Cash flows over the life of the project with positive impact on APA’s operating cash flow

• Project returns which meet hurdle or target rates commensurate with risk

 Risk – revenue and operating security

• Secure revenue through regulatory arrangements or long term contracts with creditworthy counterparties

• Maintain asset management and operation of APA’s assets and energy investments

 Customer relationship – long term focus

• Enhance total service offering across assets

 Funding

• Options that at a minimum maintain investment grade credit rating

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APA: Macquarie Australia Conference, May 2012

APA growth – creating value for investors

Total securityholder returns since listing

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800
TSR of 608%,
APA total securityholder returns
CAGR of 18.0%
700 S&P/ASX 200 accumulation index
Utilities accumulation index
600
500
400
300
200
100
0
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EBITDA
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
34.4
35
30
25
20
15
10
5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
cents
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Indexed to 100 from listing date, 13 June 2000 to 13 April 2012 Source: APA based on IRESS data

APA: Macquarie Australia Conference, May 2012

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Conclusion

 APA is well positioned in a growing market

• Continuing to expand and enhance our energy infrastructure portfolio across Australia in line with increasing demand for gas and energy

• Focused growth for the long term

• Core business growth – optimal gas delivery

• Further growth – optimal asset use

• Creating value for the long term

• Preserving or increasing the value of APA’s energy infrastructure portfolio

• Developing responsive energy infrastructure and service solutions to meet the

• requirements of our customers in a dynamic energy market

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APA: Macquarie Australia Conference, May 2012

APA asset and investment portfolio

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APA: Macquarie Australia Conference, May 2012

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For further information contact

Delivering Australia’s energy

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

or visit APA’s website www.apa.com.au