APA GROUP — Investor Presentation 2015

Nov 18, 2015

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APA Group Queensland site tour Wallumbilla Gas Hub & Integrated Operations Centre

19 November 2015

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 nor does it contain all the information which a prospective investor may require in evaluating a possible investment in APA Group. 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. Forwardlooking statements can generally be identified by the use of forward-looking words such as, 'expect', 'anticipate', 'likely', 'intend', 'could', 'may', 'predict', 'plan', 'propose', 'will', 'believe', 'forecast', 'estimate', 'target', 'outlook', 'guidance' and other similar expressions within the meaning of securities laws of applicable jurisdictions and include, but are not limited to, forecast EBITDA, operating cashflow, distribution guidance and estimated asset life. 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 and are subject to risk factors associated with the industries in which APA Group operates. Such forward-looking statements, opinions and estimates are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of APA Group, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. There can be no assurance that actual outcomes will not materially differ from these forward-looking statements, opinions and estimates. A number of important factors could cause actual results or performance to differ materially from such forward-looking statements, opinions and estimates.

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.

Non-IFRS financial measures: APA Group results are reported under International Financial Reporting Standards (IFRS). However, investors should be aware that this presentation includes certain financial measures that are non-IFRS financial measures for the purposes of providing a more comprehensive understanding of the performance of the APA Group. These non-IFRS financial measures include EBIT, EBITDA and other “normalised” measures. Such non-IFRS information is unaudited, however the numbers have been extracted from the audited financial statements.

Not an offer: This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. Securities may not be offered or sold, directly or indirectly, in the United States or to persons that are acting for the account or benefit of persons in the United States, unless they have been registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act), or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable state securities laws.

Financial data: 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, as amended. These measures are EBITDA, normalised EBITDA and statutory 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 U.S. Securities Act. These non-GAAP financial measures do not have a standardised 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 its business, investors are cautioned not to place undue reliance on any non-GAAP financial measures included in this presentation.

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APA Site Visit Presentation Nov 2015

Agenda

 APA current overview

• Transmission pipeline evolution

• Wallumbilla Gas Hub

• Integrated Operations Centre

• Gas market developments

• Future opportunities

Mick McCormack

Rob Wheals Craig Clarke Ed DePrinse

John Jamieson Mick McCormack

• Questions

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APA Site Visit Presentation Nov 2015

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APA Group overview

Mick McCormack Managing Director & CEO

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APA Site Visit Presentation Nov 2015

APA executive and management – site tour

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• Kerryanne Mallitt

General Manager East Coast Field Services

• Ian Duncan

General Manager Capital Markets

 Edwin DePrinse

General Manager Transmission Services

• Greg Meredith

Treasurer

• Ivan Byak

General Manager Commercial, East Coast

• Yoko Kosugi

Head of Investor Relations

• Walter Schutte

General Manager Market Services

• Jennifer Blake

Investor Relations Manager

• John Jamieson

Markets and Risk Manager

• Michael Butler

• Craig Clarke

IOC Manager Manager Infrastructure Construction Engineering

• Tracey Roberts

Business Development Manager (former Acting IOC Manager)

• Lyndon Brock

Regional Manager Western QLD

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APA Site Visit Presentation Nov 2015

Australia’s largest gas pipeline owner by pipeline length, capacity and volume

APA Overview (Ticker: APA AU) Market capitalisation A$10.0 billion (as at 17 November 2015) S&P/ASX 50

ASX rank

S&P: BBB (outlook Stable) Moody’s: Baa2 (outlook Stable)

Credit Rating

Assets owned/ ~ $19 billion operated

Gas transmission 14,700[(1)] km transmission pipelines Underground & LNG gas storage

Gas distribution

27,100 km gas network pipelines 1.3 million gas consumers

Australian gas transmission pipeline ownership

Other energy infrastructure 585 MW power generation 244 km HV electricity transmission Gas processing plants Employees More than 1,600

• (1) Includes 100% of the pipelines operated by APA Group which form part of its energy investments including Ethane Pipeline Income Fund, SEA Gas and EII. Figure does not include APA’s Eastern Goldfields Pipeline (293 km) which is currently under construction in WA.

Source: AER State of the Energy Market Dec 2014 ; IMO Gas Market Statement of Opportunities Dec 2014; and APA data as at 30 Jun 2015.

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APA Site Visit Presentation Nov 2015

APA’s long term strategy

 Consistent execution of a sustainable growth strategy since listing in 2000

 We’re focused on building and enhancing our core business of gas infrastructure assets

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Leveraging our asset Continuing to grow our ownership interests in management, transmission pipelines through development and further expanding the east and operational west coast grids capabilities Growing other energy Delivering responsive, infrastructure midstream valuable solutions to our assets customers

Maintaining financial flexibility

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APA’s unrivalled asset portfolio across Australia and internal expertise, together with
strong industry fundamentals, drive growth opportunities
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APA Site Visit Presentation Nov 2015

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Transmission Pipeline Evolution

Rob Wheals Group Executive Transmission

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APA Site Visit Presentation Nov 2015

Evolution of transmission services

1969 - 2012

2012 - 2015

2015 onwards

Simple Complex / multi-faceted / dynamic

Flexible / seamless / connected

• Point to point

 East Coast Grid

 Gas super highway

• Single purpose asset

• Single asset control rooms

• Simple contracts and range of services

• ~30 receipt points to ~100 delivery points

• Multi asset services – single GTA

• Development of gas markets

• Integrated Operations Centre

• Hub Services

• Portfolio grid services

• Firm Services

• As Available

 Capacity trading

• Firm service

• Interruptible services

 In-pipe trades

– As Available

• Bi-directional

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• Park / Loan

• Storage

• Park/loan

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Changing energy market dynamics have driven a shift in the way producers and gas users think about
transporting gas. APA’s innovative approach to providing seamless and flexible transport solutions
allows producers and users to maximise the benefits of this dynamic market.
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APA Site Visit Presentation Nov 2015

Evolution and delivery of innovative solutions

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Gas flows
Gas
supply
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 Changing dynamics

• LNG demand

• World commodity prices

• Changing sources of gas

• Shorter gas sales terms & trading opportunities

• Leading to:

• Increased complexity

• Competing alternatives

• Changing customer requirements and expectations

• APA’s holistic energy delivery solutions are enabled by development & installation of:

• Interconnected infrastructure

• Bi-directional capabilities

• Customer Management System

• Integrated Operations Centre (‘IOC’)

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Flexibility of APA’s infrastructure allows our customers to manage their energy portfolios dynamically
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APA Site Visit Presentation Nov 2015

Case study – multi asset GTA

An example:

• Combinations of services

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Mount Isa
As
Available Firm
Moomba Ballera Wallumbilla Brisbane
Interruptible
Pressure Services
Pressure Services
Redirection Services
to SWQP, MAPS
Sydney
Culcairn
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(and types of services) across almost all of APA’s East Coast Grid

• Under a single transportation agreement

• Flows in various directions -

• flexibility provided by bi-directional pipelines

• Services include non-firm services and pressure services

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VIC
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• Managed through APA’s new Integrated Operations Centre (‘IOC’)

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New and innovative solutions add value to the industry
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APA Site Visit Presentation Nov 2015

Operational excellence

 Enhancing infrastructure operations and maintenance

• Consolidating pipeline control and monitoring operations to ensure high reliability

• Improving asset maintenance management systems and processes across the portfolio

• Progressively adopting asset management best practice

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Satya Nand APA Transmission Young, NSW
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 Health and safety

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6.1 LTIFR [(1) ]
2.2 2.1
0.8 0.64
FY11 FY12 FY13 FY14 FY15
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– Long-term safety goal of Zero Harm – a program of continuous improvement

• Second year of 3 year HSE Strategic Improvement Plan

• (1) Lost time injury frequency rate (LTIFR) is measured as the number of lost time injuries per million hours worked. Data from FY14 includes both Employees and Contractors. Prior to that, employee only data.

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Looking after our people and assets improves service safety and reliability, operational efficiency
and extends the economic life of the assets
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APA Site Visit Presentation Nov 2015

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Wallumbilla Gas Hub

Craig Clarke Manager Infrastructure Construction Engineering

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APA Site Visit Presentation Nov 2015

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From paddock (2002) to Gas Hub - 2015
Jemena QLD
Gas Pipeline RBP
GLNG Pipeline
RBP
connection Bi-D
AGL LPG
Refinery
BWP
Origin Spring
Santos metering WCS2 Bi-D Gully Pipeline &
station WCS1 Kincora Gas
Pipeline
BWP
Origin
Santos
Wallumbilla to
compressor
Darling Downs
station
Pipeline
WCS3
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Q: What makes a gas hub? A: Connections & Services

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APA Site Visit Presentation Nov 2015

Wallumbilla Hub project

• Expanded Pressure Management Services

• Interconnect Gas Producers & Pipeline Systems

• Pressure & Flow Control Services

• Additional Compression Services

• New Redirection Services

• Gas Quality Monitoring & Measurement

2012 SWQP & QSN looping Wallumbilla Compressor Station No.2 APA acquired SWQP/QSN

2014 SWQP Bi-directional flow BWP Bi-directional flow Easternhaul Interconnect Services

2015 Wallumbilla Compressor Station No.3 GLNG CRWP supply commissioned RBP Bi-directional flow

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WCS3
WCS2 WCS1
BWP
Bi flow
SWQP
RBP- Bi flow
Bi flow
GLNG
connection
APA Wallumbilla Hub – August 2015
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Original site 2002
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APA Site Visit Presentation Nov 2015

Wallumbilla configuration - 2015

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Fairview QGP Spring Gully
~
Wallumbilla ~ WCS1
Notional WCS2
Point
~
RBP
~
West ~
East BWP
~
WCS1 Compression
SWQP
~
~ DDP
~
GLNG
Facility WCS2 Compression
~
CRWP ~
APA Site Visit Presentation Nov 2015  16
WCS3 Compression
10.2 MPa
14.92 MPa 7-10.2 MPa
7-10.2 MPa
7-10.2 MPa
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APA Hub pressure and flow services

 Interconnection of Delivery & Receipt Points

 Pressure Reduction & Compression Services

• 12 Pressure / Flow Control Skids

• WCS3 Compressor Services

• Multiple Headers

• Four Pressure Headers

• Lean & Conventional Headers

• Nomination Management

WCS3 : 3x M90-C406 Compressor Sets (250 TJ/day/unit)

• Multiple Operating Configurations

• Automated Controls for Mode Switching

 Controlled remotely by IOC

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APA Site Visit Presentation Nov 2015

APA Hub redirection and gas quality

Skids on N-S Pipe Racks

 Redirection Services

• Gas Delivery & Receipt Routing

• Gas Quality Monitoring & Management

• Out-of-Specification Gas Management

• Bi-Directional Transmission Pipeline Flows

• Market Nominations – Domestic & LNG Export

Lower – BWP Flow Reversal Skid

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APA Site Visit Presentation Nov 2015

Summary

 40 years on, Wallumbilla remains significant to the east coast gas market

 Rapid expansion over the past 5 years

 Pipeline Hubs provide a range of mid stream services

• Compression services, quality management, storage & processing

 Hubs assist to extract greater value from existing assets

• Easier access between gas market participants

• The Wallumbilla Hub range of services continues to diversify

 Gas sources, LNG projects, international oil prices & the changing domestic market

• The east coast pipeline system continues to become more interlinked

• Hub facilities maximise synergies between assets

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APA Site Visit Presentation Nov 2015

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Integrated Operations Centre

Edwin DePrinse General Manager Transmission Services

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APA Site Visit Presentation Nov 2015

The Need for Change

• APA has experienced rapid growth through acquisition over the past 10 years  5 separate pipeline control centres across 5 states

 Interconnected grid

• Requires greater integration and co-ordination

 Market is more complex and dynamic

• More nimble and proactive response, leverage commercial and engineering skills

 Interruptions to services have more critical impacts

• Ability to respond quickly in a considered and appropriate way

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Evolution of APA’s Control Room functions and facilities
to align with the size and complexity of the operations now managed,
keeping in mind the commercial challenges of the future
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APA Site Visit Presentation Nov 2015

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Darwin
Then – pipeline control centres
Control
Room
Brisbane
Control
Room
Perth
Young
Control
Control
Room
Room
Melbourne
Control
Room
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APA site visit presentation Nov 2015 APA Site Visit Presentation Nov 2015

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Now - Integrated Operations Centre

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APA’s IOC,
Brisbane
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APA site visit presentation Nov 2015 APA Site Visit Presentation Nov 2015

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The IOC “72 hour” operating window

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Engineering
Commercial
Transmission IOC
Operations
Service
Delivery
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• Focus is to deliver flexible and seamless services to our customers

• Changes in market and customer requirements

• Evolution of our thinking away from separate control rooms to an “integrated approach”

• Strategic capability that integrates:

• Interconnected gas grid pipeline infrastructure

• APA Grid customer management system

• Engineering

• System Control

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Integrating operational, engineering, commercial disciplines
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APA Site Visit Presentation Nov 2015

From multiple Control Rooms to IOC - the guiding principles

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“Minimise operational impact and maximise commercial opportunities”

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APA Site Visit Presentation Nov 2015

A day in the IOC

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Commercial
1 2
Controllers
Operations,
Engineers & Review Day ahead Customer Shift Teams
Controllers delivery, Field Activities and Handover Incoming
Gas Grid configuration. and Outgoing teams
Prep next shift. formal review.
IOC
5
Commercial 3
Continuous Management of Manager
Operations, Gas Grid performance , Customer profiles reviewed Commercial
Engineers & and Gas Grid configured
Customer delivery and Operations &
Controllers for daily deliveries
Field activities Controllers
Market Requirements
and Reporting
reviewed and actioned
(STTM)
Commercial
Operations &
Controllers
4
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APA Site Visit Presentation Nov 2015

IOC outcomes

 Operational Efficiency

• Improved efficiency & issue management (capability & authority within the IOC)

• More effective decision making when responding to unforeseen and unplanned issues

• Improved incident management

• Enhanced capability to manage workload peaks or resource shortages

• Leverages other key strategic initiatives e.g. Enterprise Asset management, Planning and Scheduling of maintenance work

 Commercial Opportunities

• Respond to customer short term needs, capture short term commercial opportunities

• Enhanced Service delivery

• Seamless, end-to-end service delivery to customers

• Status of integration

• Currently managing the East Coast Gas Grid & NT

• WA transition underway with full transition by end Feb 2016

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APA Site Visit Presentation Nov 2015

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Gas Market Developments

John Jamieson Markets and Risk Manager

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APA Site Visit Presentation Nov 2015

APA initiatives to support Gas Trading Market

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 APA’s ‘market vision’

• Voluntary physical supply hubs at multiple locations

• Contract carriage capacity market supported by well functioning secondary capacity trading market

• Balancing markets at demand centres

• APA has developed and implemented a number of new products and services to support the market

• Operational capacity transfer to support capacity trades

• Standard form contract reducing contractual complexity/variability

• Website - pipeline information, capacity offers and bids

• Short term firm capacity offers

• In pipe trades to support gas trades

• Publishing indicative tariffs

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http://capacitytrading.apa.com.au

APA Site Visit Presentation Nov 2015

Proposed APA Initiatives

 New services to support market

• Brokerage/platform for secondary capacity trading

 Wallumbilla & Moomba Hub Services

• ‘Firm day ahead’ hub service

• Trade point establishment

• Compression trading service

• Hub compression pipework enhancement

• Improved information transparency and information disclosure

• Near real time flow information

• Pipeline receipt and delivery point schematics

Wallumbilla Gas Supply Hub

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APA Site Visit Presentation Nov 2015

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Future Opportunities

Mick McCormack Managing Director & CEO

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APA Site Visit Presentation Nov 2015

Continue to enhance and expand APA’s footprint

Significant gas reserves in Australia

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Darwin
120,000PJ+ of 2P reserves
Gladstone
Moomba Brisbane
Perth
Sydney
Adelaide
Melbourne
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Extensive asset foot print in gas infrastructure already

• 14,700 km of high pressure transmission pipelines

Gas will continue to be utilised

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Solid east coast gas
consumption continues
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Source: AEMO Natural Gas Forecasting Report 19 December 2014 (‘Medium’ Case)

In-house operational capability

• 1,600+ employees

• 50+ offices around Australia

• Moomba and Wallumbilla compressor facilities

• Mondarra gas storage facility

• Development of the IOC

• Efficient corporate and operational cost allocation

• Gas processing plants at Tipton West and Kogan North

APA’s asset footprint & capabilities, coupled with demand for gas, provides continuous opportunities

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APA Site Visit Presentation Nov 2015

Midstream assets and services

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Wallumbilla compressor station Capacity trading
Pipeline construction
Processing Compression
& servicing
Metering
Gas storage solutions
 LNG
 Underground
 In-pipe
Gas Markets
Gas Source Mondarra gas storage facility
APA already offers a range of midstream assets and services - it’s what we do
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APA Site Visit Presentation Nov 2015

Questions

APA Site Visit Presentation Nov 2015 APA Site Visit Presentation Nov 2015

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For further information contact Yoko Kosugi Investor Relations, APA Group Tel: +61 2 9693 0049 E-mail: yoko.kosugi@apa.com.au

Delivering Australia’s energy

or visit APA’s website

www.apa.com.au