APA GROUP — Investor Presentation 2014

Jun 18, 2014

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APA Group – consistent strategy in a dynamic market

Mick McCormack Managing Director and CEO UBS Australian Resources, Energy and Utilities Conference 19 June 2014

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.

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APA Group June 2014

About APA Group

APA is Australia’s largest gas infrastructure business

 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

APA

Market A$5.8 billion capitalisation S&P/ASX 50 MSCI All World Index; FTSE All World Index

836 million securities on issue

 Gas distribution networks

• Owning and operating approximately a third of the nation’s gas distribution networks

 Other related energy infrastructure

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

Jemena

Source: APA & AER State of the Energy Market 2013

Assets owned/ Over $12 billion operated Gas transmission 14,120 km transmission pipelines Underground and LNG gas storage Gas distribution 25,000 km gas network pipelines 1.2 million gas consumers Other energy infrastructure 430 MW power generation[(1) ] 239 km HV electricity transmission Gas processing plants Employees More than 1,600 Operator Operator of APA’s assets and investments

• (1) Includes the Diamantina and Leichhardt power station developments

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APA Group June 2014

APA’s long term strategy

Strategy is focused on our core business of gas pipelines – transmission and distribution infrastructure

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Facilitating development
Enhancing APA’s portfolio of gas
of gas related projects
infrastructure assets in Australia’s
that enhance APA’s
growing energy market
infrastructure portfolio
Capturing revenue and operational Pursuing opportunities that
synergies from APA’s significant asset leverage APA’s knowledge
and skills base
base
Strengthening financial capability
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1H14 highlights

• Contribution of recent pipeline acquisitions exceeding expectations

• Value creation from a flexible and resilient interconnected infrastructure portfolio

• Maintaining market leading position

APA’s unrivalled asset portfolio across Australia and internal expertise, together with strong industry fundamentals, drive growth opportunities

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APA Group June 2014

Abundant gas supply for domestic and export markets

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981 PJ
17,384 PJ
70,386 PJ
41,285 PJ
178
PJ
1,802 PJ
39
PJ
2,283 PJ
APA Group gas infrastructure assets and
investments
Other natural gas pipelines
250
PJ Natural gas 2P reserves (proved and probable) 754 PJ PJ 3,568 PJ
Source: APA data; EnergyQuest May 2014
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• Proven and probable gas reserves total 139,000 PJ[(1) ]

  • Domestic gas use for 2013 was 1,110 PJ and 1,090 PJ for LNG export[(1)]

  •  More than 50 years of gas available at current usage levels

• Identified gas resources exceed 430,000 PJ[(2) ]

  •  Almost 200 years of gas available at current usage levels

• (1) 2012 gas production, LNG production and gas reserves: Energy Quest, May 2014

• (2) BREE Gas Market Report, July 2012,

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APA Group June 2014

Long term growth in gas demand

• Australia’s total primary energy consumption is expected to increase by 10% over the next 20 years[(1) ]

• Natural gas represents 25% of primary energy … and this share is expected to increase over the long term

• LNG exports supplied by on-shore gas fields expected to ramp up in the next few years

• Surat-Bowen basin supply for east coast LNG projects to be supplemented by gas sourced from other inland basins – existing producing gas fields and new gas field developments

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4%
25%
36%
35%
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Australian Eastern Market LNG demand

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Source: “Gas Statement of Opportunities”, November 2013, AEMO

Source: 2013 Australia Energy update, BREE, July 2013

• (1) Australian Energy projections to 2050, BREE, December 2012,

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APA Group June 2014

Developing a national integrated portfolio, …

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Darwin
Brisbane
Perth
Sydney
Adelaide
Melbourne
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APA foundation assets

APA acquisitions and developments (assets and investments) Other gas pipelines and distribution systems

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Expansions

• Strategy of expanding and enhancing APA’s gas infrastructure portfolio

  • Foundation assets - $1.3 billion

    • • acquisitions
    • • greenfield developments
    • • organic expansions

    • -- partial divestments

    • APA assets today - $7.8 billion[(1) ]

• Developing complementary assets that enhance APA’s portfolio

  • Energy assets adjacent to APA’s infrastructure

• Leveraging knowledge and skill base

  • Operating $12.2 billion of assets

• Strengthening balance sheet

  • Maintaining investment grade credit rating

• (1) As at 31 December 2013

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APA Group June 2014

… well positioned in a dynamic energy market

NT link to east coast grid: Feasibility study

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APA’s east coast grid:
APA’s WA infrastructure:
Darwin > 7,000 km of pipelines
> 3,000 km pipelines
5 major pipelines
Gas transport and storage services
5 states and territories
Mining and south west regions
Mount Isa
Pilbara
region
Goldfields Gladstone
region
Brisbane
Perth
Sydney
Adelaide
Potential APA natural gas pipeline link
APA natural gas pipelines (including investments)
Other natural gas pipelines Melbourne
Gas resource Gas production
LNG export facility
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 East coast grid

• Interconnected transmission pipelines operating as one system

• Seamless service capability across 30 receipt points and 100 delivery points

• Attractive growth and revenue opportunities

• West Australian infrastructure

• Pipelines serving mining regions

• Interconnected gas storage and transportation to Perth

• NT pipeline link

• APA feasibility study: Connecting APA’s pipelines to facilitate gas flow across regions

Seamless gas delivery and storage services

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APA Group June 2014

East coast grid adapting to and driving market changes

• Seamless services across the grid

• Multi-pipeline gas transportation agreements

• Storage services

• Flexibility to manage gas supply and demand portf ~~o~~ lios

• Capacity trading

• Optimising grid infrastructure and operation

• Expanding capacity - Victoria

• Configuring multiple pipelines to operate as a single pipeline - Queensland

• Compression expansions – Wallumbilla hub and Moomba

• Developing bi-directional capability

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Gladstone
Wallumbilla
Moomba
Brisbane
Sydney
Adelaide APA natural gas pipelines (including investments)
Other natural gas pipelines
Gas storage
Melbourne Gas production
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Developing bi-directional capability
Forward haul 
Backward haul 
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Requires modification of
existing (or new)
compressor stations with
pipework and valves
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APA Group June 2014

WA portfolio serving mining and Perth regions

Gas basins and operating mines near APA’s pipelines, WA

• Major gas pipeline infrastructure serving the mining regions – Pilbara and Goldfields

• Goldfields Gas Pipeline capacity increase - underwritten by 20 year and 15 year contracts with Rio Tinto and Mt Newman JV

• Contract renewals – Murrin Murrin Operations (GlencoreXstrata) 15-year gas transportation contract

• Growth driven by new mine developments, existing mine expansions and fuel conversion from diesel to gas for power generation

• Gas supply security for the Perth and coastal region

• Mondarra Gas Storage Facility expansion completed July 2013 – underpinned by 20 year contract (Synergy)

• Infrastructure close to new and potential gas sources

• Carnarvon, Gorgon and Canning basins

Mines Iron ore Copper Nickel Gold Other Source: APA; Australian Mines Atlas

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APA Group June 2014

Connecting eastern and northern regions

• Strategic initiative to connect the Northern Territory and the east coast

• Pipeline linking APA’s east coast grid and Northern Territory pipelines

 Benefits and rationale

• Linking existing APA pipeline infrastructure

• Connecting regions to new and existing alternative gas sources

• Seamless, cost effective end-to-end gas transportation service

• Flexibility and service options across multiple injection and withdrawal points

 Feasibility study commenced

• Route selection

• Engineering

• Commercial viability

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Darwin
Route A
Gladstone
Wallumbilla
Route B
Brisbane
Moomba
APA natural gas pipelines (including investments)
Other natural gas pipelines
Potential pipeline link
Gas production
Onshore gas exploration
Gas resource
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APA Group June 2014

Developing growth capital projects across Australia

 Continued expansion and enhancement of APA’s gas infrastructure portfolio

• Growth opportunities unique to APA

 Committed projects underwritten by long term revenue contracts and/or regulatory arrangements

FY 2014 FY 2015 FY 2016 Moomba Sydney Southern lateral expansion for northern gas flow Pipeline Victorian Capacity expansion of southern and northern sections of the Transmission System transmission system Diamantina and Leichhardt Power Stations Goldfields Two pipeline Goldfields Gas Gas PIpeline expansions Pipeline Capacity expansion Moomba Compression for eastern haul transportation compression Wallumbilla Compression at Wallumbilla hub for deliveries to compression Gladstone LNG Moomba Compression Capacity expansion Mondarra Gas Expanded capacity Storage Facility Diamantina 242 MW gas fired power station Power Station 60 MW back up generation APA energy infrastructure Victorian Transmission APA investments System Capacity expansion Other natural gas pipelines

Wallumbilla Compression Capacity expansion

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APA Group June 2014

Revenue security and diversity

• Diversified revenue base – single assets supply no more than 20% of revenue

• Revenue secured by long term take-or-pay contracts or regulatory arrangements

Revenue by business segment[(1) ]

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$900m
6%
Energy Investments
$800m
Asset Management 1H14 Revenue split
9%
WA and NT
$700m Energy Other 1%
Vic and SA Infrastructure WA
&
25% Regulated revenue
$600m Qld NT (regulated assets)
NSW 24%
$500m
Vic 19%
&
SA
$400m
Contracted revenue
$300m (regulated assets)
Contracted revenue
Qld 25% 14%
(light regulation and
$200m non-regulated assets)
18% 61%
24%
$100m
NSW
16%
58%
$0m
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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• (1) Excludes pass-through revenue and divested businesses

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APA Group June 2014

Growth, value and security for securityholders

 Stable and growing distributions

• Outperforming market returns

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40
30
APA TSR: 952%
APA CAGR: 18.3% 20
10
0
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Total securityholder returns since listing

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1100
1000
900
800
700
600
500
400
300
200
100
0
APA total securityholder returns S&P/ASX 200 accumulation index Utilities accumulation index
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Indexed to 100 from listing date, 13 June 2000 to 13 June 2014 Source: APA based on IRESS data

Distributions

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(cents per security)
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36.25 [(1) ]
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Total annual returns

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50%
43%
40%
31%
29%
30%
23%
18%
20%
10%
0%
2009 2010 2011 2012 2013
-10%
-20%
APA Total Securityholder Return
-30% S&P/ASX200 Accumulation index
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• (1) Based on interim distribution of 17.5 cents per security and estimated final distribution of 18.75 cents per security

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APA Group June 2014

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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