APA GROUP — Investor Presentation 2014

May 7, 2014

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APA’s integrated gas infrastructure business

Ross Gersbach Chief Executive Strategy and Development

Macquarie Australia Conference 8 May 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, May 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

 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

APA (6 May 2014)

A$5.6 billion S&P/ASX 50 MSCI All World Index; FTSE All World Index

Market

capitalisation

836 million securities on issue 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

Source: APA & AER State of the Energy Market 2013

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APA Group, May 2014

APA’s long term strategy

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

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 Contribution of recent pipeline
Facilitating acquisitions exceeding expectations
Enhancing APA’s portfolio of –
development Existing and new growth opportunities
gas infrastructure assets in –
Operational efficiency
of gas related projects
Australia’s growing energy
that enhance APA’s  Benefiting from a flexible and resilient
market
interconnected infrastructure portfolio
infrastructure portfolio
–
East coast grid potential – seamless
services; optimising asset operation
Pursuing opportunities
Capturing revenue and  Enhancing the gas delivery chain
that leverage APA’s –
operational synergies from APA’s … across transmission and distribution
knowledge and skills –
significant asset base … across states and territories
base
 Maintaining market leading position
–
National portfolio with unique growth
Strengthening financial capability
opportunities
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• Existing and new growth opportunities

• Benefiting from a flexible and resilient interconnected infrastructure portfolio

• … across transmission and distribution

• Maintaining market leading position

• National portfolio with unique growth opportunities

• Industry-leading management, operating and engineering capability

• – Funding strength

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

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APA Group, May 2014

Gas supply and demand fundamentals remain strong

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981 PJ
17,384 PJ
70,386 PJ
41,285 PJ
178
PJ
1,802 PJ
54
PJ
2,283 PJ
APA Group gas infrastructure assets and
investments
Other natural gas pipelines 250
PJ Natural gas 2P reserves (proved and probable) 750 PJ PJ 3,568 PJ
Source: APA data; EnergyQuest February 2014
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Australian gas consumption and LNG export projections[(2) ]

• 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

• Australia’s gas production, consumption and exports are all projected to grow over the period to 2034–35

  • Domestic use forecast to increase by 33%, or 1.3%/a[(2) ]

• On-shore gas supply for east coast LNG

  • Surat-Bowen basin supply for east coast LNG projects to be supplemented by other on-shore gas sources

• (1) 2012 gas production, LNG production and gas reserves: Energy Quest, February 2013 (2) BREE Gas Market Report, July 2012,

• Longer term growth underpinned by gas-fired electricity generation

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APA Group, May 2014

Strategic development of pipeline grid

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NT link to east coast grid:
• Feasibility study

APA’s east coast grid:
Darwin • > 7,000 km of pipelines
APA’s WA infrastructure: • 5 major pipelines
• Servicing mining regions • 5 states and territories
• Gas transport and storage for Perth
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

• Interconnected gas storage and transportation to Perth

• Pipeline infrastructure serving mining regions

• NT link –APA feasibility study

• Connecting APA’s infrastructure to facilitate gas flow across regions

Transformational change in gas delivery and storage services

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APA Group, May 2014

East coast grid adapting to market changes

• New gas transportation agreements across the east coast grid

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Compression expansion
Gladstone
Wallumbilla and Moomba
Capacity optimisation
Wallumbilla
SWQP - RBP operating as
single pipeline
Brisbane
Moomba
Bi-directional pipelines
Vic-NSW – operating
SWQP – under construction
BWP – in planning
MSP and RBP - proposal
Sydney
Adelaide
Capacity expansion
Melbourne VTS – northern zone
MSP – southern lateral
APA natural gas pipelines (including investments)
Other natural gas pipelines
Bi-directional pipeline
Gas storage
Gas production
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• Multi-pipeline gas transportation agreements

• New short term South West Queensland Pipeline agreements due to capacity available from connected grid

• New Berwyndale Wallumbilla Pipeline agreement

• Three revised Moomba Sydney Pipeline agreem ~~e~~ nts with retailers increasing gas volumes transporte ~~d~~ through the Victorian Transmission System into New South Wales

• Enhancing physical operation of the grid

• South West Queensland Pipeline and Roma Brisbane Pipeline configured to operate as single pipeline

• Compression expansions at Wallumbilla hub and at Moomba

• Installing or planning bi-directional capability on four pipelines

• Capacity expansion on the Victorian Transmission System northern zone

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APA Group, May 2014

WA portfolio serving mining and Perth regions

Operating mines near APA’s pipelines, WA

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

• Completion of expansion projects on the Goldfields Gas Pipeline – capacity increase of 28%, underwritten by 20 year and 15 year contracts

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

• Providing gas supply security for the Perth and coastal region

• Mondarra Gas Storage Facility expansion completed July 2013 – underpinned by 20 year contract with Verve Energy

• Infrastructure close to new and potential gas sources – Carnarvon, Gorgon and Canning basins

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Pilbara Pipeline
Telfer Nifty
System
Pipeline
Goldfields Gas
Pipeline
Mid West
Pipeline
Mondarra Gas
Storage Facility
Mondarra Gas
Storage Facility
Parmelia Gas
Pipeline
Mines
Iron ore
Copper
Nickel
Gold
Other Source: APA; Australian Mines Atlas
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APA Group, May 2014

Mondarra Gas Storage Facility – key strategic asset

 Expansion completed mid 2013

• 15 PJ storage capacity

• 70 TJ/d injection capability

• 140 TJ/d withdrawal capability

• Connected to major pipelines

• Dampier to Bunbury Pipeline

• Parmelia Gas Pipeline (APA)

• Majority of capacity contracted

• 20 year contract with Verve Energy

• Strong interest from other customers for remaining capacity

• Flexible services and tariff structures to meet the market

Providing security and managing supply volatility

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APA Group, May 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 to com ~~m~~ ence in FY14

• 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, May 2014

Envestra Scheme – update

• Scheme proceeding based on the offer accepted by the Envestra Independent Board Committee

• Offer consideration of scrip and cash, with implied value of $1.30[(1)] per Envestra

• Attractive premium to Envestra’s trading price prior to APA’s merger proposal and Envestra’s closing price on 6 May 2014

Rationale

  - Core business – gas distribution

  - Largest shareholder and service provider

• Scheme Booklet issued to Envestra shareholders in early April

• The Envestra Recommending Directors (majority of non-APA affiliated directors) recommend the Scheme in the absence of a superior proposal[(2)]

• Revenue certainty and appropriate commercial returns

• Significant capex growth

• Independent Expert concludes the Scheme is fair and reasonable and in the best interest of Participating Envestra Shareholders in the absence of a superior proposal

• Delivery chain from source to

  • customer

• The Australian Taxation Office confirmed the availability of partial scrip for scrip rollover relief

 Timeline

13 May 30 May

(1) Implied value of ‘all scrip’ consideration based on APA’s closing price on 6 May 2014

(2) Recommendation is subject to the Independent Expert continuing to conclude that the Scheme is fair and reasonable and in the best interests of Participating Envestra Shareholders

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APA Group, May 2014

Significant gas distribution expertise

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
Darwin Darwin
Network


Wide Bay
Pipeline
Brisbane
Network
Brisbane
Allgas
Network
Tamworth
Alice Springs
Network
Network
Sydney
Adelaide Adelaide
Wagga
Network
Network
Berri Mildura
Victorian
Pipeline Melbourne
Network
APA pipeline and network assets
APA investments
Envestra networks and pipelines
GDI network
Other pipelines – SEA Gas, EII, EPX
Other natural gas pipelines
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• Owning and operating approximately a third of Australia’s gas distribution networks

• Interlinked assets, with networks connected to APA’s transmission pipeline assets and/or investments

• Experienced workforce and extensive internal capability

• National workforce of 550 APA employees and 940 contractors

  • Long term operators and managers providing full range of network services: - Commercial and billing;

• Operations and maintenance;

• Engineering, planning and construction;

• Gas marketing ;

kti
areng ; atory and financial services APA Networks businesses Network investments % Envestra 33.05 GDI - Allgas 20 Tamworth, Darwin 100	FY 2013 Network statistics
	Total gas consumers 1,254,643 New consumers added 25,885
	Meters installed (new) 28,583 Meters replaced 59,196
	Pipeline length 25,000 km Pipeline laid (new) 221 km Pipeline replaced 435 km
	Gas transported 121 PJ

• Regulatory and financial services

Owning and operating almost a third of the nation’s distribution networks

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APA Group, May 2014

Gas distribution – growth and renewal

• Working with state government groups to develop regional gas opportunities

• Regional Victorian and NSW projects

• Input into key government policy impacting gas usage

• Extending gas distribution into new urban development

• Programs to increase gas connections and gas usage

• ‘Natural gas’ promotion through advertising, gas appliance rebate schemes, and B2B relationships (e.g. home builders, developers, plumbers, etc..)

• Working with developers of new gas-fueled technology

• Increasing capacity and reducing costs through the mains renewal program

• Converting low pressure cast iron pipelines to higher pressure steel or polyethylene pipelines

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Tanunda, SA
www.maketheconnection.com.au
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APA Group, May 2014

Diamantina and Leichhardt power stations

 Commissioning phase underway

• First power delivered to North West Power System in early October 2013

• All open-cycle gas units commissioned

• Commissioning of steam turbines for combined-cycle operation underway

• Currently providing up to 80 MW generating capacity for MIM operations

• Project construction

• KBR (owner’s engineer) appointed EPCM contract following Forge receivership and termination of Forge EPC contract

• Activity on site to complete the project maintained, with key Forge personnel and service providers retained

 Leichhardt Power Station

• Fixed price EPC contract with Leighton Contractors

• Open-cycle gas unit in commissioning phase

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APA Group, May 2014

Developing growth capital projects across Australia

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

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

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

Wallumbilla Compression Capacity expansion

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APA Group, May 2014

Continued value creation for securityholders

Total securityholder returns since listing

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1100
1000
APA TSR: 894%
APA CAGR: 18.1%
900
800
700
600
Total annual returns
500
50%
43%
400
40%
31%
300 29%
30%
23%
200 18%
20%
100
10%
0 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 Jun-12 Jun-13 2009 2010 2011 2012 2013
-10%
APA total securityholder returns S&P/ASX 200 accumulation index Utilities accumulation index
-20%
APA Total Securityholder Return
Indexed to 100 from listing date, 13 June 2000 to 11 April 2014
-30% S&P/ASX200 Accumulation index
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Indexed to 100 from listing date, 13 June 2000 to 11 April 2014 Source: APA based on IRESS data

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APA Group, May 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