APA GROUP — Investor Presentation 2014

Aug 19, 2014

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New pipeline developments Linking Australia’s gas markets for improved energy security

Rob Wheals, Group Executive Transmission SEAAOC, Darwin 20 August 2014

About APA Group

APA is Australia’s largest gas infrastructure business

APA is an integrated operating business with direct management and operational control over its assets and investments

Core business areas

 Gas transmission pipelines and storage

• Owning and operating two thirds of Australia’s onshore pipelines

• Interconnected pipeline networks

• Transporting approximately half the gas used domestically

 Gas distribution networks

• Operating approximately a third of the nation’s gas distribution networks

APA (August 2014) Market A$6.4 billion capitalisation S&P/ASX 50 MSCI All World Index; FTSE All World Index Assets Over $12 billion owned/ Gas transmission operated 14,100 km transmission pipelines Underground and LNG gas storage Gas distribution 27,100 km gas network pipelines 1.3 million gas consumers Other energy infrastructure 430 MW power generation[(1) ] 239 km HV electricity transmission Gas processing plants

 Other related energy infrastructure

• APA has developed and acquired complementary energy infrastructure, including gas and wind electricity generation, gas processing and electricity transmission

Employees More than 1,600 Operator Operator of APA’s assets and investments

APA Group, August 2014

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APA – Australia’s largest gas pipeline owner

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Darwin
Gladstone
Brisbane
Moomba
Perth
Sydney
Adelaide
APA natural gas pipelines
Other natural gas pipelines
Melbourne
Gas storage
Gas production
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APA Group, August 2014

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APA in the Northern Territory and east coast

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Darwin
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Northern Territory

• 2,000 km gas pipelines

• Long term presence in the Northern Territory – since 1980’s wit ~~h NT G~~ as until 2011

East coast grid

• 7,000 km across 5 states and territories

• Configuring pipelines to operate as single network system

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Gladstone
Brisbane
Moomba
Sydney
Adelaide
Melbourne
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APA Group, August 2014

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NT link background

• Strategic initiative to connect NT to the East Coast Gas Grid

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Darwin

Gladstone
Brisbane
Moomba
Sydney
Adelaide
natural gas pipelines
r natural gas pipelines
Melbourne
torage
roduction
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• Flexible energy supply across the system, regardless of input/exit points

• Announced feasibility study for NT Link project and commitment of $2 million (Feb 2014)

• Assessing various connection options, including environmental considerations and cost estimates, to determine the most efficient and commercially viable link

APA Group, August 2014

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East coast gas market – supply challenges

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• More than tripling of east coast demand due to LNG exports

• Supply sufficient for east coast demand for ~ 20 years

• BUT does not allow for any increase in demand, or any decline in reserves, or any demand beyond 20 years

Source: AEMO Gas Statement of Opportunities Update, May 2014

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Source: Queensland Department of Natural Resources and Mines, Coal Seam Gas Reserves, update 1 July 2014

• Surat-Bowen CSG reserves

• = 82.4% of East Coast 2P reserves

APA Group, August 2014

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Northern Territory gas resource

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Darwin
Gladstone
Brisbane
Moomba
Sydney
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Sydney
Adelaide
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Melbourne
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• 200 TCF[(1][)] of gas resources

• 3 primary potential supply zones:

Offshore NT

• Producing assets and staged developments in place

• ~60 TCF of identified reserves

• East NT

• Unconventional gas under exploration

• 5+ years from full development

• South NT

• Small volumes of producing assets and unconventional gas

• 5+ years from full development

• (1) NT Government media release 19 February 2014. Potential reserves of approximately 240 TCF across 6 basins

• 1 TCF ≅1,000 𝑃

APA Group, August 2014

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NT Link Project Benefits

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Darwin
Moomba
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Gladstone
Brisbane
Moomba
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Sydney
Adelaide
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 Encourages exploration & production to meet growing demand

• Opens new markets & supply competition

• Seamless transport between Timor Sea, Bass Strait, Sydney and Gladstone

• Significant additional security of supply – East coast gas market growth (LNG exports)

• Ongoing delays in development of New South Wales and Victorian CSG

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Melbourne
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APA Group, August 2014

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Feasibility study update

Infrastructure

• Preliminary assessment of several possible pipeline routes

• evaluating environmental considerations

• determining whole of project construction cost estimates

• route flyovers commenced (August 2014)

• Detailed engineering

• 3 pipeline routes modelled, others being evaluated

• infrastructure requirements in process of being defined

Commercial

• Determining minimum volume required for project to be viable

• Early stage discussions with large downstream users on East Coast

• Exploratory discussions with major upstream producers & juniors/explorers

Government

• Ongoing dialogue with government (Fed, State and Territory) & other stakeholders

APA Group, August 2014

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Pipeline route options

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Darwin
Gladstone
Brisbane
Moomba
Sydney
Adelaide
Melbourne
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 A number of viable pipeline options … each with its own challenges and opportunities

	Option A	Option B	Option C
Location	To Mt Isa	To Moomba	To CGP
Length	620 km	1,100 km	700 km
Water crossings	6	11	9
Flood(1)	25,000	352,000	117,000
Rock/ outcrops	35-45km	25-35km	50-60km

(1) Susceptibility to flooding – km[2] catchment upstream

APA Group, August 2014

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Development considerations

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Darwin
Moomba
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Gladstone
Brisbane
Moomba
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Sydney
Adelaide
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• Focused on identifying the most efficient and commercially viable link with the east coast grid

• Working with upstream and downstream parties to determine the most likely gas flow path

• Gas delivered to the east coast grid can be seamlessly delivered to any major delivery point

• Potential for additional LNG trains in the Northern Territory is a risk to NT Link development

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Melbourne
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APA Group, August 2014

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Development considerations

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Darwin
Gladstone
Brisbane
Moomba
Sydney
Adelaide
Melbourne
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Potential pipeline option – RED

• Key gas sources – offshore and eastern NT

APA Group, August 2014

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Development considerations

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Darwin
Gladstone
Brisbane
Moomba
Sydney
Adelaide
Melbourne
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Potential pipeline option – BLUE

• Gas sourced from all three locations (offshore, eastern NT and southern NT)

APA Group, August 2014

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Development considerations

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Darwin
Gladstone
Brisbane
Moomba
Sydney
Adelaide
Melbourne
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Potential pipeline option – GREEN

• Key gas sources – eastern NT and southern NT

• Pipeline travels through existing producing fields

APA Group, August 2014

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Conclusion

• Strategic initiative providing flexible energy supply between Timor Sea, Bass Strait, Sydney and Gladstone

• Feasibility study well underway – expected to be completed in FY2016

• Focus is to identify the most efficient and commercially viable link with the east coast grid

• Infrastructure sized to meet demand

• Working with upstream and downstream parties to best understand the likely gas path

APA’s unique offering

• APA can deliver a whole of system approach, leveraging the network capability from the east coast

• APA has appropriate capability, expertise and resources to fully develop this project in conjunction with NT Government

APA Group, August 2014

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Delivering Australia’s Energy

For further information contact Sam Pearce NT Link Project Director, APA Group Tel: +61 2 9693 0000 E-mail: sam.pearce@apa.com.au

or visit APA’s website

www.apa.com.au