APA GROUP — Investor Presentation 2016

Nov 9, 2016

APA investor day connecting Australia’s energy future.

==> picture [134 x 54] intentionally omitted <==

10 November 2016, Sydney

disclaimer

==> picture [104 x 42] intentionally omitted <==

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

The information in this presentation does not contain all the information which a prospective investor may require in evaluating a possible investment in APA Group and should be read in conjunction with the APA Group’s other periodic and continuous disclosure announcements which are available at www.apa.com.au.

All references to dollars, cents or ‘$’ in this presentation are to Australian currency, unless otherwise stated.

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 seek professional advice if necessary.

Past performance: Past performance information should not be relied upon as (and is not) an indication of future performance.

Forward looking statements: This presentation contains certain forward looking information, including about APA Group, which is subject to risk factors. “Forward-looking statements” may include indications of, and guidance on, future earnings and financial position and performance. Forward-looking 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 and include, but are not limited to, forecast EBIT and EBITDA, operating cashflow, distribution guidance and estimated asset life.

APA Group believes that there are reasonable grounds for these forward looking statements and due care and attention have been used in preparing this presentation. However, the 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. 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.

Non-GAAP financial measures: 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.

2

section 1 introductions and overview.

==> picture [134 x 54] intentionally omitted <==

3

today’s agenda

8:30 1 introductions and overview 9:00 2 gas market dynamics & growth strategy 9:30 3 organic pipeline growth opportunities 10:00 4 opportunities in power generation 10:20 5 capital management 10:40 morning tea 11:00 6 east coast grid 11:20 7 gas pipeline coverage criteria 11:50 8 general regulatory update 12:10 9 questions

Peter Fredricson Ross Gersbach Rob Wheals Sam Pearce Ian Duncan

Ivan Byak Nevenka Codevelle Peter Bolding panel

12:40 lunch

4

APA today

==> picture [104 x 42] intentionally omitted <==

experience. track record. sustainable.

OUR PEOPLE

• Approx 1600 employees & 1200+ field contractors

• Working in 60 city, regional & remote locations

• In every mainland state & territory in Australia

==> picture [210 x 166] intentionally omitted <==

LOOKING AFTER $20B IN ASSETS

• 15,000 km gas transmission pipelines

• 27,300 km gas distribution mains & pipelines

• Gas storage & processing facilities

• Power generation - renewables & gas-fired generation

Mick McCormack, Managing Director & Chief Executive Officer

• Kevin Sam Rob Ross Peter Lester Pearce* Wheals Gersbach Fredricson

• INFRASTRUCTURE NETWORKS & TRANSMISSION STRATEGY & FINANCE DEVELOPMENT POWER DEVELOPMENT • Transmission • Group-wide

• Engineering & • Network asset asset • M&A and finance & infrastructure management, management, corporate IT services projects operations & operations, development • Investor relations Procurement Infrastructure • maintenance Power assets maintenance & development •• Energy investments Strategy & •• Treasury Taxation planning & protection protection management, operations & operations & • regulatory Media & • Insurance development • Shared services communication

Ross Peter Elise Nevenka Gersbach Fredricson Manns Codevelle STRATEGY & FINANCE HUMAN SECRETARIAT DEVELOPMENT RESOURCES & LEGAL

• Engineering & • Network asset infrastructure management, projects operations &

  • Group-wide • Company HR services Secretariat

  • • Health, & Legal Safety & services Environment • Risk

• Investor relations

• Infrastructure • Power assets planning & protection protection management, operations & operations & development

• From 1 Dec 2016. John Ferguson is currently Group Executive Networks. Networks & Power Division will combine this group with Power assets team currently under Strategy & Development Division.

5

what we are about

==> picture [104 x 42] intentionally omitted <==

infrastructure. success.

“owner and operator of energy infrastructure underwritten by long term contracts with highly creditworthy counterparties”

==> picture [138 x 138] intentionally omitted <==

We’ve responded to the dynamic gas market by:

• Enhancing our infrastructure

• Connecting markets

• Upgrading our systems

==> picture [164 x 200] intentionally omitted <==

----- Start of picture text -----

We’re providing customer -
centric solutions by:
----- End of picture text -----

• Creating innovative energy solutions

• Delivering essential services

• Investing in systems capability

==> picture [164 x 200] intentionally omitted <==

----- Start of picture text -----

We’ve become experts in
our industry by :
----- End of picture text -----

• Building comprehensive in-house development, engineering, commercial and operations expertise & skills across all of the assets we own & operate

6

10/11/2016

APA’s core strategy

==> picture [104 x 42] intentionally omitted <==

We’re an ASX 50 company with a clear objective:

To provide the best return for our Securityholders

how we’ll deliver this

enhancing our portfolio of energy capturing infrastructure revenue & assets in Australia’s operational growing energy synergies market

==> picture [387 x 116] intentionally omitted <==

----- Start of picture text -----

facilitating the
development of pursuing
energy-related opportunities that strengthening our
projects that leverage our financial
enhance our knowledge & capability
infrastructure skills base
portfolio
----- End of picture text -----

what we need to do to support this objective

keep manage our deliver customers in operations & personal mind in assets job goals to a everything we efficiently high standard do

manage our business costs efficiently & effectively

always focus on safety – ours & those around us

actively support APA’s culture, values & brand

7

gas in a dynamic energy market

==> picture [104 x 42] intentionally omitted <==

east coast gas production by field

Source: APPEA (~2003); EnergyQuest (2004-2015); AEMO (forecast)

electricity market drivers – significant changes

FY01 electricity generation by fuel

FY15 electricity generation by fuel

==> picture [561 x 143] intentionally omitted <==

Source: Australian Energy Statistics 2016, Department of Industry, Innovation and Science

8

we’ve created a unique set of energy assets & expertise

==> picture [104 x 42] intentionally omitted <==

• Interconnected gas transmission pipeline grid:

• 7,500km on the East Coast, and growing

• 1,800km into Goldfields region

• Integrated Operations Centre (IOC)

• • Flexible contracts

• Complementary gas assets provide options for growth:

• Generation – gas & renewables

• Gas storage – in-pipe, LNG tank, underground

• Gas processing

• Asset management, operational expertise across distribution and transmission assets

• • Energy infrastructure development capability

9

delivering long-term sustainable returns to securityholders

==> picture [104 x 42] intentionally omitted <==

TSR CAGR: 17.6% p.a. over 16 years

Distributions CAGR: 4.7% p.a. over 16 years

10

health, safety & environment

==> picture [104 x 42] intentionally omitted <==

Safety initiative example - SafeDrive+ program

strategic framework

compliance themes

environment management

contractor management

fatal risk protocols

Safeguard improvement

culture themes

fitness for work

leadership program

safety behaviour program

safety days

SafeDrive+ is a structured management program targeting the risks associated with driving

==> picture [241 x 241] intentionally omitted <==

Outcomes

• Winner APGA Safety Awards 2016

• Arrive Alive Campaign

• Reduction in driving related incidents from previous years

• Revised Fleet HSE management systems completed, including installation of 290 In Vehicle Monitoring Systems

• Developed 4x4 vehicle online training program

• Big 4 campaigns (Fatigue, Drugs and Alcohol, Distractions & Speed).

11

diversity & inclusion strategy

==> picture [104 x 42] intentionally omitted <==

vision

Value & harness the unique talents, experiences & perspectives of our people which contribute to strengthening our culture, our brand & sustained business performance

4 key foundation areas

inclusive work culture

knowledge & collaboration

APA aims to have a workplace culture in which all employees are naturally inclusive of all people, adept at managing relationships with those who are different from themselves and skilled at leveraging diversity in their teams

Knowledge, diverse perspectives and expertise in APA are openly shared through collaborative networks with appropriate technology and systems to support this

people systems

APA Values – S.T.A.R.S

The people systems in APA deliver the desired talent outcomes – retain good people, reward and recognise desired performance and attract the right people to the right roles

Employees at all levels associate with and mirror the APA values in all that we say and do

3 key focus areas

diversity of gender

APA attracts and retains female talent and develops high quality female leaders

diversity of age

APA is resilient in the face of generational change, ensuring there is sufficient inflow of diverse talent to replace those exiting

diversity of thought

Diversity of thought is the driver of improved problem solving and innovation leading to improved business performance

12

section 2 gas market dynamics & growth strategy.

==> picture [134 x 54] intentionally omitted <==

Ross Gersbach, Chief Executive Strategy & Development

==> picture [511 x 108] intentionally omitted <==

13

gas supply and demand – Queensland is the key

==> picture [104 x 42] intentionally omitted <==

Expected east coast gas supply (post LNG ramp-up)

• on

• Significant uncertainties – mostly the supply side

==> picture [277 x 283] intentionally omitted <==

----- Start of picture text -----

Other 5%
Cooper
4%
Gippsland
14%
Qld CSG
77%
----- End of picture text -----

Source: EnergyQuest

• Meeting east coast gas demand requires substantial continuing drilling plus drilling success by Qld coal seam gas producers

• QCLNG and APLNG are maintaining reasonable drilling programs

• Key swing factors

• How hard will GLNG run train 2?

• When will Arrow further develop its reserves

• APLNG and QCLNG appear well placed to participate in the sale of natural gas to the domestic market

14

==> picture [54 x 449] intentionally omitted <==

growth strategy

Grow our gas pipelines by expanding existing assets; building new assets and via acquisitions

Develop a portfolio of wind, solar and gas generation facilities, underwritten by long term offtake contracts

Expand Australian mid-stream energy infrastructure portfolio

Continue due diligence on North American markets

==> picture [104 x 42] intentionally omitted <==

all opportunities will target a risk/return profile consistent with that of APA’s current portfolio of assets

15 15

focusing on the core business is critical

==> picture [104 x 42] intentionally omitted <==

in this context, we have identified in excess of $5.0B growth capex opportunities in our core gas transmission asset portfolio over FY16-30

16

a long list of growth opportunities was constructed, with varying degrees of distance from the core

==> picture [104 x 42] intentionally omitted <==

Core	Close adjacencies (“0.5 step”) 1 step 2 steps ≥ 3 steps	Close adjacencies (“0.5 step”) 1 step 2 steps ≥ 3 steps	Close adjacencies (“0.5 step”) 1 step 2 steps ≥ 3 steps	Close adjacencies (“0.5 step”) 1 step 2 steps ≥ 3 steps
	Close adjacencies (“**0.5 step”) **
		1 step
			2 steps
				≥ 3 steps
•Natural gas transmission, compression and storage in Australia • Non core businesses where we currently play on a small scale and have existing capabilities •Non gas transmission •Gas other midstream, up/ downstream •International transmission •Other infrastructure asset classes in Australia •International gas other midstream, up/ downstream •International other infrastructure assets

17

non-pipeline growth opportunities

==> picture [104 x 42] intentionally omitted <==

Criteria used to filter the long list:

• Closeness to the core to increase the odds of execution success

• Attractive fundamentals (e.g., large/growing market, attractive returns, value chain disaggregation etc)

• Strong investment thesis for APA (e.g., purchase surplus assets, synergies with APA network increasing returns etc)

• Acceptable level of risk vs. current portfolio (e.g., low operation risk or ability to mitigate risk through partnerships, contracts etc)

==> picture [532 x 55] intentionally omitted <==

midstream Onshore processing & gathering

==> picture [137 x 124] intentionally omitted <==

----- Start of picture text -----

power
generation
(wind, solar
and gas)
----- End of picture text -----

international transmission

18

midstream opportunity

==> picture [104 x 42] intentionally omitted <==

==> picture [84 x 172] intentionally omitted <==

----- Start of picture text -----

context Industry
----- End of picture text -----

• Market has grown to meet LNG gas demand, expected to reach 9,600TJ/d capacity by 2030

• Three types of processing & gathering assets:

• Junior processing: ~2% of market, owned by small cap E&P companies with high risk-return profile

• Domestic processing: ~36% of market, owned by mid to large cap E&P companies with focus on domestic gas

• LNG processing: ~62% of market, asset bundles owned by multi-national consortia to feed LNG exports and domestic gas

• Size: ~$28B in assets, including gas processing plants and onshore gathering infrastructure

• Asset availability: divestment of processing & gathering increasingly seen as a necessity / attractive opportunity by current owners

• Proven concept: asset carve-out model supported by experience in U.S. midstream market

APA

rationale

• Strong balance sheet and low cost of capital versus current E&P asset owners

• Ability to drive operational synergies differentiates APA from financial investors

19

APA rationale

US due diligence

==> picture [104 x 42] intentionally omitted <==

• USA has delivered ~2% p.a. growth in gas production since 2011, driven by unprecedented growth in shale gas production (~15% p.a.) that has fundamentally changed the market

• ~$45B growth capex in gas infrastructure assets from 2011-15 with shifting gas landscape

• Gas price decline of ~65% since 2014 is driving growing financial pressure across the market

• Size: Largest gas transmission infrastructure market (~$300B assets, >9x larger than Australia)

• Returns: Typically, players achieve moderate median TSR of ~12% p.a., ROE from ~8-12% p.a.

• Risk: Low macro risk and strong long-term gas supply/demand fundamentals

• Strong balance sheet and access to capital currently differentiates us from many USA operators

• Strong operational capabilities differentiate us from most financial investors (e.g. Private Equity)

20

section 3 organic pipeline growth.

==> picture [134 x 54] intentionally omitted <==

Rob Wheals, Group Executive Transmission

==> picture [573 x 139] intentionally omitted <==

21

organic pipeline growth opportunities

==> picture [104 x 42] intentionally omitted <==

• $700m pipeline extension and expansions opportunities identified over the short term ( ~ 3 years)

• Target growth areas:

• Supporting the LNG industry

• Firing up the resources sector

• Bringing new gas supply to market

• Transitioning to renewables

• Enabling gas market liquidity

==> picture [379 x 249] intentionally omitted <==

----- Start of picture text -----

Victorian Northern Interconnect expansion
----- End of picture text -----

Curtis Island connection point on WGP

Construction of Eastern Goldfields Pipeline

22

delivering to customer requirements

customers want:	how APA delivers:
Simplicity	• 1 contract: - multiple services & pipelines • 1 invoice • 1 APA customer manager
Flexibility	• add / change services • intra-day noms • in-pipe trades
Optionality	• bi-directional flow between markets • short term flexible services • park / loan services
Reliability	• service levels • system redundancy • 24 x 7 operations / IOC

==> picture [104 x 42] intentionally omitted <==

“Origin is now able to think differently about how to best manage our gas portfolio with the new range of transport and storage services that APA is able to provide. APA has applied smart thinking to its interconnected pipeline grid in the east to create innovative services and unprecedented flexibility for customers like Origin. APA is responding to the market demands, but more than that, they’re opening up new possibilities and opportunities that are reshaping how Origin and other gas producers, shippers and retailers do business.”

FRANK CALABRIA, CEO Origin Energy (quote from APA 2014 Annual Report)

23

supporting the LNG industry

MARKET OPPORTUNITY

• transporting third party gas supply

• managing interruptions to supply chain

• facilitating market opportunities

==> picture [104 x 42] intentionally omitted <==

CASE STUDY: RCWP

• new 50km 18 inch pipeline, capex $80m

• connects APLNG with Wallumbilla Hub

• 300TJ/d bi-directional service

==> picture [57 x 30] intentionally omitted <==

APA RESPONSE

• new pipeline infrastructure

• flexible / timely transportation services

• park / loan services (storage)

==> picture [45 x 47] intentionally omitted <==

Simplicity Flexibility

==> picture [57 x 29] intentionally omitted <==

FUTURE OPPORTUNITIES

• grid connections & augmentations

• compression services

• flexible storage services

==> picture [45 x 48] intentionally omitted <==

==> picture [45 x 48] intentionally omitted <==

Reliability

Optionality

24

firing up the resources sector

MARKET OPPORTUNITY

• competitive supply - electricity generation

• managing process plant interruptions

• reliable supply, safe logistics, lower emissions

==> picture [57 x 29] intentionally omitted <==

APA RESPONSE

• end-to-end transportation solution

• cost competitive, cleaner energy

==> picture [104 x 42] intentionally omitted <==

CASE STUDY : EGP

• new 293km 8 inch pipeline, capex $140m

• extends GGP, total distance 1800 km

• delivers gas to Tropicana, Sunrise Dam & Granny Smith gold mines

==> picture [56 x 29] intentionally omitted <==

FUTURE OPPORTUNITIES

• other mines in region e.g. Dacian Gold & Vimy Resources (Uranium)

• Gold Road Resources (WA) & Tanami (NT)

• Lithium and Magnetite Projects (Pilbara)

• park / loan services

==> picture [45 x 47] intentionally omitted <==

Simplicity Flexibility

==> picture [45 x 48] intentionally omitted <==

Optionality Reliability

25

bringing new gas supply to market

MARKET OPPORTUNITY

• new infrastructure connecting gas supply with existing pipeline system

• cost competitive access to

• market(s)

==> picture [56 x 29] intentionally omitted <==

APA RESPONSE

• marketing / aggregating demand to enable cost effective solutions

• end-to-end transportation solution

==> picture [104 x 42] intentionally omitted <==

CASE STUDY : COMET RIDGE

• non-binding MOU - deliver gas to market

• explore pipeline & midstream infrastructure opportunities

==> picture [57 x 30] intentionally omitted <==

FUTURE OPPORTUNITIES

• QLD: Galilee / Surat / Bowen Basins

• NSW: Gunnedah Basin

• WA: Perth Basin

• land access, licenses, pipeline design & construct

==> picture [45 x 47] intentionally omitted <==

Simplicity Flexibility

==> picture [45 x 48] intentionally omitted <==

Optionality

==> picture [45 x 48] intentionally omitted <==

Reliability

26

transitioning to renewables

MARKET OPPORTUNITY

• gas as transition fuel

• • managing the peak

• • security of supply

==> picture [56 x 29] intentionally omitted <==

APA RESPONSE

• transportation services, storage

• multi receipt / delivery services

• wind generation since 2011, leveraging existing infrastructure expertise

==> picture [45 x 47] intentionally omitted <==

Simplicity Flexibility

==> picture [104 x 42] intentionally omitted <==

CASE STUDY : SA ELECTRICITY MARKET

• reliance on wind (40%), shutdown of coal/gas

• • perfect storm: 7 July 2016

• • gas brought back on!

==> picture [57 x 29] intentionally omitted <==

FUTURE OPPORTUNITIES

• retirement of coal

• “fast start” - stability in electricity supply

• dependent on gas price, climate policies

==> picture [45 x 48] intentionally omitted <==

Optionality Reliability

27

enabling gas market liquidity

MARKET OPPORTUNITY

• gas trading hubs

• removal of physical constraints

• pipeline flexibility

==> picture [56 x 29] intentionally omitted <==

APA RESPONSE APA RESPONSE

• bi-directional / re-direction services

• in-pipe trades, capacity trading

• pipeline interconnection – flexibility and short term storage

==> picture [45 x 47] intentionally omitted <==

Simplicity Flexibility

==> picture [104 x 42] intentionally omitted <==

CASE STUDY : WALLUMBILLA HUB UPGRADE

• de-bottlenecking , capex < $20m

• improves flexibility & use of compression facilities

• increases capacity of hub services

==> picture [57 x 29] intentionally omitted <==

FUTURE OPPORTUNITIES FUTURE OPPORTUNITIES

• Victorian Northern Interconnect expansion currently underway

• LNG market connections to domestic market at APA’s Wallumbilla Hub

==> picture [45 x 48] intentionally omitted <==

==> picture [45 x 48] intentionally omitted <==

Reliability

Optionality

28

summary

==> picture [104 x 42] intentionally omitted <==

Continued innovation & investment to meet customer requirements Pipelines playing a key role in domestic and now LNG gas markets

$700m pipeline extension and expansions opportunities identified

Supplying gas to Origin’s Uranquinty Power Station in NSW

29

section 4 power generation.

==> picture [134 x 53] intentionally omitted <==

Sam Pearce, Group Executive, Networks & Power (from 1 December 2016)

==> picture [683 x 107] intentionally omitted <==

30

power assets – existing footprint

==> picture [104 x 42] intentionally omitted <==

Thermal Generation

• DPS/LPS (302MW)

• • X41 (42MW)*

• Daandine (33MW)*

Renewable Generation

• EDWF (80MW)

• NBHWF (132MW)*

Transmission

• Directlink (168MW)*

• Murraylink (220MW)*

• Part owned

• power generation portfolio of significant scale, fits with APA strategy of energy infrastructure with long term offtake arrangements with strong counterparties

• gas-fired generation is complementary to APA’s gas transmission infrastructure

• renewable generation provides APA with investment opportunities which meet APA’s criteria

31 31

APA’s power portfolio has developed against the backdrop of changes in the power generation sector

==> picture [104 x 42] intentionally omitted <==

==> picture [644 x 208] intentionally omitted <==

----- Start of picture text -----

2009 2011 2011 2014 2016 2016
EII 132MW APA 80MW DPS/LPS DPS/LPS 100% DPS EDSF: ARENA
Halllet 4 EDWF Announced Commissioned Acquired Funding
Acquisition Acquisition 302MW
2012 2013 2014 2016 2017
Mortlake Macarthur Nyngan Pt Augusta, Hazelwood
OCGT WF Solar Closed Closure
550MW 440MW 102MW 760MW 1,600MW
2001 2009 2012 2014 2015
Mandatory RET RET Target reviewed to Carbon Tax Carbon Tax RET Target finalised at
introduced 2% Target 20% / 41TWh Target Introduced Repealed 33TWh Target
----- End of picture text -----

==> picture [171 x 157] intentionally omitted <==

==> picture [175 x 160] intentionally omitted <==

Source: Australian Energy Statistics 2016, Department of Industry, Innovation and Science

32

case study - Diamantina and Leichhardt Power Stations

==> picture [104 x 42] intentionally omitted <==

• Efficient gas fired generation

• Long term contracts in place for:

• MIM and Ergon – each to 2030

• OEM for major maintenance

• Gas supply to 2023, with gas supply obligation reverting to electricity offtaker after then

• Opportunities for incremental load

Key Statistics	Key Statistics
Capacity	302MW
Heat Rate	8.5GJ/MWhr (avg)
Target Availability	99.5%
Total Gas Requirements	40TJ/Day (avg)
Total Staff	18

• Around 20MW identified in the near term

• Around 50MW in the longer term

• Usage of CGP for gas transportation

Acquisition of 50% from AGL in FY16 50% Equity acquired $150m Implied Enterprise $700m Value FY17 EBITDA multiple ~8 times

• DPS/LPS meets investment criteria, and has potential incremental value capture opportunities

33 33

renewable generation is a growing sector

==> picture [104 x 42] intentionally omitted <==

WIND CAPACITY GROWTH OF ~36% P.A.

WIND GENERATION ONLY 5% OF NEM IN 2015

Wind power installed capacity in Australia (MW)

2015 Electricity generation by source in NEM (Gwh)

==> picture [254 x 276] intentionally omitted <==

==> picture [270 x 306] intentionally omitted <==

• wind has been the most successful over the past 15 years, but is still only ~5% of the NEM generation

Note: NEM = National Electricity Market; RET = Renewable Energy Target; Other includes Biomass, grid-solar and liquid fuels Source: Global Wind Energy Council (GWEC), Global Wind Report: Annual Market Update 2014, Green Energy Markets, 2015

34

government policy expected to continue to drive renewable generation development

==> picture [104 x 42] intentionally omitted <==

RET TARGET 33,000GWH REQUIRES ADDITIONAL ~7600MW RENEWABLES

Exact mix of solar/wind will depend on speed of solar cost reduction. Expect more wind to be added earlier, and solar later.

==> picture [278 x 190] intentionally omitted <==

	Target	by
National	Fixed target 33,000 GWhs	2030
QLD	50%	2030
VIC	40%	2025
ACT	100%	2020
SA	50%	2025
NSW	No target

• significant renewable generation (wind and increasingly solar) will be required over the short/medium term to meet policy commitments

Note: Additional capacity estimate based on 35% capacity factor for wind and 25% for solar and assumptions on wind/solar mix driven by expected LCOE curve. Source: ACIL Allen 2014, Lit Search,

35

case study – Emu Downs Solar Farm

==> picture [104 x 42] intentionally omitted <==

==> picture [263 x 181] intentionally omitted <==

Key Statistics

Capacity 20MW Efficiency 30% Target Output ~53GWhr/yr Expected Early 2018 completion date

• EDSF generation profile expected to complement EDWF

• Transmission connection is de-risked and cost efficient as it utilises EDWF

• Total capex of ~$50m, ARENA funding of $5.5m.

• Long term offtake arrangements being finalised

==> picture [394 x 173] intentionally omitted <==

• Emu Downs Solar Farm is in the process of securing long term offtake arrangements, with project economics improved by the ARENA funding

• APA has established a development model for solar farms based on its EDSF experience

36 36

power generation current opportunities

==> picture [104 x 42] intentionally omitted <==

• Gas fired generation opportunities in WA, NT, QLD aimed at stand alone customer requirements

WA Gas fired: ~50-100MW Renewables: ~150MW

NT Gas fired: ~ 50 – 100MW QLD Gas fired: • ~ 50 – 100MW

VIC Gas fired: up to 1000MW

APA also has a large potential gas fired generation site in Vic (Wollert), proximate to electricity transmission

Renewables – in addition to EDSF and Badgingarra WF, APA is pursuing other opportunities, primarily in Eastern Australia

==> picture [220 x 146] intentionally omitted <==

• APA’s existing power generation opportunities across Australia. Development of these opportunities will be dependent on securing customer commitments

• Further opportunities are also under development

37 37

section 5 capital management.

==> picture [134 x 54] intentionally omitted <==

Ian Duncan, General Manager Capital Markets

==> picture [232 x 279] intentionally omitted <==

38

debt maturity profile

==> picture [104 x 42] intentionally omitted <==

• APA maintains a diverse range of funding sources and a long-dated spread of maturities

• $10 billion of bond issues, loans and headroom, comprising:

• bank facilities, AMTN, EMTN (EUR, GBP, CAD, JPY), 144A, USPP & ASX listed sub-notes (hybrids)

Notes:

• USPP notes of A$86m were repaid in July 2016 upon their maturity

• A$200m of 7 year notes (maturing in 2023) were issued under our AMTN program on 20 Oct 2016

• USD denominated obligations translated to AUD at the prevailing rate at inception in 2015 (USD144A @ 0.7879, EMTN & Sterling @ 0.7772)

39

balance sheet

• APA’s debt portfolio has grown in step with growth in its Total Assets

==> picture [104 x 42] intentionally omitted <==

• Gearing in the range of 65% - 68% results in metrics consistent with maintaining stable BBB and Baa2 credit ratings

Metrics	Jun 2016 Jun 2015
Gearing(per bank compliance certificate) Interest cover ratio(per bank compliance certificate) Average interest rate for drawn debt Interest rate exposure fixed or hedged Average maturity of senior facilities Cash and committed undrawn facilities	66.4% 63.4% 2.60x 2.59x 5.64% 6.76% 86.5% 94.0% 7.4 years 8.5 years $754 M $1.6 B

40

business-as-usual funding

==> picture [104 x 42] intentionally omitted <==

• BAU debt raising over the next several years will focus on:

• refinancing maturing US Private Placement notes in long term public markets; &

• terming out bank borrowings in those markets as benchmark parcels of drawn loans accrue

==> picture [669 x 358] intentionally omitted <==

41

risk management culture

==> picture [104 x 42] intentionally omitted <==

• APA’s Treasury & Risk Management Policy (“policy”) addresses:

• risk appetite and risk limits (interest rate, foreign exchange, counterparty exposure, liquidity & refinancing risks, et al)

• • hedging approaches

• governance principles such as reporting structures, separation of duties and delegated limits of authority

• credit rating objectives

• Generally, 100% of FX and 80-90% of interest rate exposures are hedged:

• currently, +/- 25bp move in BBSW represents a -/+ $2.9m risk p.a. to net profit

• Regular internal audits and robust Audit & Risk Management Committee reviews oversee ongoing operation of and compliance with the policy

• Investment Grade credit ratings are a prerequisite to participation in the global debt capital markets, so APA will maintain long-term credit ratings of at least BBB (stable) from Standard & Poor’s and Baa2 (stable) from Moody’s

• APA’s commitment to its credit ratings is reiterated regularly by APA’s Board & its senior management, e.g. annual meeting address by Chairman, Len Bleasel AM, 27/10/16:

“… we will ensure appropriate risk allocation and funding mix ensuring we maintain the BBB and Baa2 investment grade ratings that underpin the strength of our balance sheet …”

42

credit ratings

==> picture [104 x 42] intentionally omitted <==

• Continuously stable ratings from S&P and Moody’s since initiation in 2009 & 2010 respectively

• Ratings components:

― Business Risk: “EXCELLENT” classification:

     - _large and diverse portfolio of quality gas pipelines and energy infrastructure assets_

     - _long-term agreements with customers with a high level of take-or-pay revenues_

     - _revenue stability and low operating risk_[*]

• Financial Leverage: “AGGRESSIVE” (S&P) / “HIGH” (Moody’s):

   - “ _this high leverage is manageable because the group's large portfolio of assets and its commanding position in the Australian gas transportation market increases the visibility of the group's operating cash flow_ ”[* ]
  

• “

• • we expect APA to maintain FFO to debt of around 9-10% and FFO to interest coverage of

• around mid-2 times, compared with the minimum rating tolerance levels of 8% and above 1.9x respectively ”[*]

  • 9.3% and 2.8 times as at 30 June 2016

“notwithstanding APA's appetite for inorganic growth through asset acquisitions in recent years, the group has demonstrated its ability and commitment to manage leverage levels consistent with the rating” *

Source: * Moody’s Investor Service, Credit Opinion, APT Pipelines Ltd , 15 April 2016

43

distribution policy

==> picture [104 x 42] intentionally omitted <==

• Securityholder distributions are funded fully from Operating Cash Flow

• Grow generally in line with Operating Cash Flow

• Regard for capital needs of the business and economic conditions

• Sustainable over the long term

Normalised operating cash flow

==> picture [329 x 224] intentionally omitted <==

----- Start of picture text -----

Distributions
----- End of picture text -----

44

investment discipline

==> picture [104 x 42] intentionally omitted <==

• Capital expenditure and acquisitions are funded with an appropriate mix of cashflows retained in the business; equity; and debt, to comfortably maintain BBB/Baa2 credit ratings

• At mid points of FY17 guidance, EBITDA less funding costs and distributions leaves $435m retained to fund SIB and organic capex

• Majority of revenues earned from investment-grade shippers including gas producers, utilities and energy retailers as well as miners, an attribute which reduces exposure to cyclical downturns impacting specific industries

• Approximately 90% of revenues in the form of fixed capacity charges and regulated revenues

==> picture [210 x 213] intentionally omitted <==

==> picture [322 x 219] intentionally omitted <==

Customer Industry

Customer Credit Rating

Contract Type

45

debt facilities

==> picture [104 x 42] intentionally omitted <==

• Total committed debt facilities at 31 October 2016

A$ million	Facility	Drawn	Tenor
	amount	amount
2015 & 2016 Bilateral bank facilities	550	30	2 to 5 year facilities maturing between May 2018 to May 2021
2015 Syndicated bank facilities	830	622	2.25, 3.25 and 5.25 year tranches maturing September 2017, 2018 and 2020
2003 US Private placement	96	96	15 year tranche maturing September 2018
2007 US Private placement	811	811	10, 12 and 15 year tranches maturing May 2017, 2019 and 2022
2009 US Private placement	99	99	10 year tranche maturing July 2019
2010 AUD Medium Term Notes	300	300	10 year tranche maturing July 2020
2016 AUD Medium Term Notes	200	200	7 year tranche maturing October 2023
2012 JPY Medium Term Notes	126	126	6.5 year tranche maturing in June 2018
2012 CAD Medium Term Notes	289	289	7.1 year tranche maturing in July 2019
2012 US144a Notes	735	735	10 year tranche maturing October 2022
2012 GBP Medium Term Notes	536	536	12 year tranche maturing in November 2024
2012 Subordinated Notes	515	515	60 year term, first call date March 2018
2015 US144a Notes1	1,774	1,774	10 and 20 year tranches maturing March 2025 and March 2035
2015 GBP Medium Term Notes1	1,140	1,140	15 year tranche maturing March 2030
2015 EUR Medium Term Notes1	1,826	1,826	7 and 12 year tranches March 2022 and 2027
Total	9,827	9,099

Note 1 . Retained in, or hedged into, fixed rate US dollar obligations

46

morning tea

==> picture [134 x 54] intentionally omitted <==

recommence at 11am

47

section 6 east coast grid. Ivan Byak, General Manager Commercial East Coast

==> picture [134 x 54] intentionally omitted <==

==> picture [232 x 185] intentionally omitted <==

48

development of transmission services

1969 - 2011 2012 - 2015

single asset multi asset

• Single asset

• East Coast Grid

• Single direction

• Linking of assets

• Multiple GTA’s

• Standard GTA’s

• ~ 40 receipt and ~100 delivery points

• Separate control rooms

• Basic services

• Bi-directional

• Capacity trading

• • Controlled by IOC

==> picture [101 x 128] intentionally omitted <==

==> picture [69 x 45] intentionally omitted <==

==> picture [104 x 42] intentionally omitted <==

2016 & beyond

multi asset & grid service

• Customer Gas Portfolio

• Management of gas

• • One bespoke GTA with a collection of standard services, value based

• • Access to trading hubs, power generation, retail and industrial

==> picture [167 x 166] intentionally omitted <==

49

multi asset services

Old contract

• Underwritten by firm contracts

• Typically capacity + throughput

• Point to point

• No flexibility

==> picture [104 x 42] intentionally omitted <==

Contracts today

• Underwritten by firm contracts

• Flexibility

• Storage

• In-pipe trades

• Capacity trading

Benefits

for customers

• monetise their asset

• IOC managed

7,500+ km system, multi-functional

• gas player rather than gas taker

• reduce risk of stranded gas

for market

• market solutions

• • flexibility

for APA

• creates new revenue opportunities

• • economies of scale

50

what the future looks like – grid services

==> picture [104 x 42] intentionally omitted <==

Currently engaged in:

• customer engagement

• prototyping

Key objectives

• Simplicity

reduced nominations

• Flexibility and Optionality

access to any receipt / delivery point combination

• Transparency

• supports informed decision making through simplified information availability

==> picture [183 x 180] intentionally omitted <==

• Consistency

standard product range

• Smarter operation and optimisation

enable greater firm delivery of gas on the east coast grid

51

types of services

==> picture [104 x 42] intentionally omitted <==

==> picture [550 x 451] intentionally omitted <==

52

MSP update

==> picture [482 x 179] intentionally omitted <==

----- Start of picture text -----

Moomba
Moomba
Dec
TO
2015 Sydney
Sydney
Pipeline
Pipeline
----- End of picture text -----

==> picture [104 x 42] intentionally omitted <==

==> picture [426 x 248] intentionally omitted <==

==> picture [427 x 25] intentionally omitted <==

----- Start of picture text -----

Flow reversal skid connects to pipeline for bi-directional flows
----- End of picture text -----

==> picture [279 x 283] intentionally omitted <==

----- Start of picture text -----

Sydney
53
markets Southern
----- End of picture text -----

section 7 APA’s submission to the Vertigan Review on gas pipeline coverage criteria.

==> picture [134 x 54] intentionally omitted <==

Nevenka Codevelle, Company Secretary & General Counsel

54

Vertigan Review - how we got here

==> picture [105 x 43] intentionally omitted <==

April 2015

ACCC commences 12 month East Coast Gas Inquiry (ECGI) following request by Commonwealth given concerns as to sufficiency of gas supply

April 2016 ECGI Report released

Aug 2016

CoAG considers report and asks Dr Michael Vertigan to consult and advise whether (as the ACCC claims) there is sufficient evidence to justify a change to the test for pipeline regulation (coverage test) Mid Oct 2016 Submissions and consultation Dec 2016 CoAG to consider Dr Vertigan’s findings and recommendations

55

APA submission - key points

==> picture [104 x 42] intentionally omitted <==

APA RESPONSE:

ACCC PROPOSITION:

Monopoly pricing claim is FLAWED

==> picture [44 x 65] intentionally omitted <==

CEG Economics

Widespread monopoly pricing resulting in inefficient outcomes justifies a lowering of the threshold for regulation

Impact of lower tariffs on delivered price of gas is UNCLEAR

Cost of increased regulation and uncertainty is SIGNIFICANT

Current coverage test works and provides CERTAINTY

==> picture [44 x 65] intentionally omitted <==

==> picture [44 x 65] intentionally omitted <==

==> picture [44 x 64] intentionally omitted <==

CEG Economics

The Brattle Group

Neil Young QC opinion Houston Kemp Economists

56

Pipelines have delivered – innovation and investment since 2000

…enabling optimised efficient use of network of assets and innovative service delivery

==> picture [105 x 43] intentionally omitted <==

 service availability

industry $30bn APA $12bn+

• reliability

 flexibility supporting a trebling of demand

==> picture [35 x 163] intentionally omitted <==

market efficiency benefits

 $120m - $150m since 2012 from the East Coast Grid  . $15m - $32m p.a going forward

The Brattle Group Report, 2016

57

pipeline tariffs - impact on gas prices

==> picture [104 x 42] intentionally omitted <==

• Transmission pipeline tariffs make up 5-10% of the delivered price of gas for retail customers

• Gas transmission charges have not increased in real terms year on year since 2002 notwithstanding a 65% increase in delivered gas price in that time

• ACCC claim that 10-50% reduction in transport tariffs could lead to $0.20/GJ to $1.02/GJ reduction in delivered price of gas is overly simplistic and unreliable - Unrealistic assumption of 100% pass through by producers to customers of any transport saving

Eastern Australia industrial market wholesale gas prices

Annual East Coast Gas Consumption

==> picture [322 x 161] intentionally omitted <==

Source: Gas Price Trends Report, large industrial customer data, Feb 2016, Oakley Greenwood, commissioned for the Department of Industry, Innovation and Science.

Source: AEMO

58

pipeline tariffs are outworkings of competitive process or regulation

==> picture [104 x 42] intentionally omitted <==

South West Queensland Pipeline (SWQP)

Carpentaria Gas Pipeline (CGP)

• Light regulation pipeline

• Constructed 1997, competitive bid process by Qld Gov’t

• Tariffs are outworkings of a number of competitive processes over many years

• 2012 tariffs re-set downwards in response to competitive alternative from CopperString Project

• Published standing tariffs reflect pricing from outworking of NEGI competitive bid process

Roma Brisbane Pipeline (RBP)

• Fully regulated

Moomba Sydney Pipeline (MSP)

• Combination of unregulated and light regulation pipelines

• Constructed 1976 by Commonwealth Gov’t

• Sold to AGL under pre-existing gov’t agreed tariff arrangements (then spun out to form APA)

Central Ranges Pipeline (CRP) & Central West Pipeline (CWP)

• Full and Light regulation pipelines respectively

• Tariffs lower than under a regulated outcome

• Tariffs remain same in real terms except for uplift for capacity maintenance

Victorian Transmission System (VTS)

• Fully regulated

• Greenfield pipelines subject to competitive tensions

• No increase in tariffs in real terms since 2002

==> picture [163 x 58] intentionally omitted <==

• Transmission price represent 5-10% of retail delivered price

59

ACCC findings of monopoly pricing are flawed

==> picture [104 x 42] intentionally omitted <==

• ACCC accepts active competition for pipeline development with shippers securing competitive price outcomes

• ACCC relies on 3 flawed propositions:

1. excessive rates of return on incremental projects

2. pricing for ancillary services is too high

3. charging above operating costs on older pipelines is not warranted

$125m invested by APA to increase the compression capacity at Moomba

==> picture [46 x 8] intentionally omitted <==

----- Start of picture text -----

10/11/2016
----- End of picture text -----

60

flawed ACCC position - detail

==> picture [104 x 42] intentionally omitted <==

	incremental project returns			minor ancillary services			older pipelines
•	Some perspective – in		•	Ancillary services made up		•	ACCC assertion that
	aggregate, the 6 APA			less than 0.5%of APA’s total			once the construction
	projectsaccount for less			revenue for 1HFY16			costs have been
	than 1.25% of APA’s enterprise value		•	Only 2 instances out of some 300 contracts of APA pricing			recovered, tariffs should reduce to
•	Misleading to look at			above ACCC benchmark			operating cost only
	incremental project returns			with negligible revenues		•	Approach is
	on stand alone basis without regard to underlying asset value		•	APA standard pricing for ancillary services is consistent with that approved by the			inconsistent with charging in competitive industries
•	Regulated return not an			AER for regulated pipelines			which reflects new
	appropriate benchmark –						entrant costs, and
	risks borne by unregulated						also with well
	assets are higher than if						established regulatory
	regulated						principles and the
							National Gas Rules
			1H16 East
			Coast Grid
			revenue split

61

coverage test

==> picture [104 x 42] intentionally omitted <==

• Since Hilmer in 1993, three reviews by Productivity Commission (2013, 2004 and 2001) and the Harper Review (2015) – no substantive change recommended

• ACCC asserts the current test does not deal with monopoly pricing, non vertically integrated industries and inappropriately considers competition instead of efficiency

• Each assertion is incorrect and ignores how decision makers, the Competition Tribunal and the Courts have applied the test

• “The conclusions the ACCC reaches based on the examples amount to no more than unsubstantiated assertions” Neil Young QC

APA’s investment in its centralised Integrated Operations Centre has enabled a more agile approach to customer needs and services APA can provide

==> picture [46 x 8] intentionally omitted <==

----- Start of picture text -----

10/11/2016
----- End of picture text -----

62

==> picture [54 x 540] intentionally omitted <==

consequence of ACCC’s Test is uncertainty… stymies investment

==> picture [104 x 42] intentionally omitted <==

ACCC acknowledges dampening effect of regulation on investment and innovation

Current alignment between the gas pipeline coverage test and general National Access Regime would be broken

Would lose 20 years of established principle and regulatory certainty

ACCC test is extremely broad and confers “considerable discretion” on the decision maker and doesn’t provide any “practical guidance”, Neil Young QC

$325m investment on expansion projects on the South West Queensland Pipeline to increase capacity and flow direction flexibility

Uncertainty stymies investment incentives

63

a final word

==> picture [104 x 42] intentionally omitted <==

• Industry has delivered for the market – unrivalled record of investment and innovation

• ACCC claims of monopoly pricing are flawed, no case for change to current coverage test

• ACCC test would destroy investment and innovation, at a time when particularly needed to enable transition to a cleaner energy future

• Increased regulation is not the solution to increasing gas supply

==> picture [46 x 8] intentionally omitted <==

----- Start of picture text -----

10/11/2016
----- End of picture text -----

$6bn investment by APA to acquire the Wallumbilla Gladstone Pipeline, increasing the seamless, interconnected East Coast Grid by another 556kms 64

section 8 general regulatory update.

==> picture [134 x 54] intentionally omitted <==

Peter Bolding, General Manager Strategy & Regulatory

==> picture [683 x 76] intentionally omitted <==

65

gas market development

In response to the fundamental changes in the East Coast gas market a package of gas market changes has been initiated by the Council of Australian Governments Energy Council at its August 2016 meeting

The package of changes addresses ― Gas Supply ― Market Operation ― Gas Transportation ― Market Transparency

==> picture [104 x 42] intentionally omitted <==

==> picture [322 x 423] intentionally omitted <==

----- Start of picture text -----

Wallumbilla Hub
----- End of picture text -----

66

gas market – changes proposed

==> picture [104 x 42] intentionally omitted <==

• Market operation

• establish two trading hubs for gas commodity:

  • a physical Northern Trading Hub at Wallumbilla

  • a virtual Southern Trading Hub over the VTS

• Gas transmission pipelines

• capacity auctioning for contracted but un-nominated capacity

• standardisation of operational, prudential and other provisions in gas transportation agreements

• platform for electronic exchange based trading of pipeline capacity products

• publication of information (including pricing) on all secondary trades of pipeline capacity and hub services

• increased information disclosure by pipelines

• review of Parts 8 to 12 of National Gas Rules

67

gas market – implementing the changes

==> picture [104 x 42] intentionally omitted <==

• Reforms to be implemented by Gas Market Reform Group (GMRG), headed by Dr Michael Vertigan, and supported by dedicated project team

• GRMC to consult with stakeholders (industry, consumers, governments), and stakeholders to be represented on technical working groups

• GMRG to be operational by December 2016

• Implementation of reform package over the period 2016 to 2021

==> picture [694 x 281] intentionally omitted <==

----- Start of picture text -----

COAG Energy
Senior stakeholder
Council GAS MARKET REFORM GROUP
Attends meetings, engagement,
& stakeholder communicating progress &
sessions & provides objectives and seeking
progress reports Independent Chair feedback & input
Senior Committee
of Officials Provides quarterly
Project Management Office Consultation
progress reports
Participants
Secretariat
Industry
Gas Market
Project Project Senior Technical
Consumers
Implementation Attends monthly Manager Advisor
Team meetings &
provides updates Governments
TECHNICAL WORKING GROUPS
Pipeline Capacity --- Wholesale Markets --- Information and Transparency Active members
----- End of picture text -----

68

AEMC review of the Victorian declared wholesale gas market

==> picture [104 x 42] intentionally omitted <==

• AEMC draft final report was released 21 October 2016

• AEMC recommends:

• a new Southern Hub model where gas trading would occur on a voluntary, continuous basis

(in contrast to current mandatory pool)

• a mandatory, continuous balancing mechanism (participant incurs System Operator balancing costs if it is out of balance in the same direction that the system as a whole is out of balance)

• access to the VTS through tradeable entry and exit capacity rights

• Much detail yet to be determined

• detail deferred to the GMRG

• APA unconvinced of the benefits relative to the current structure

• Does not use commercial drivers to deliver asset efficiency

Wollert compressor station, VIC

69

Roma Brisbane Pipeline access arrangement

==> picture [104 x 42] intentionally omitted <==

• Next access arrangement period 1 July 2017 – 30 June 2022

• LNG projects have resulted in changes in gas flows in the region

• midline injections from CSG fields are becoming more prominent

• changes in the Brisbane and power generation markets

• In response to customer demand, RBP proposes to include within the reference services

• both Eastbound and Westbound gas transportation services

• both Long Term and Short Term arrangements

• Draft decision expected Jan 2017; Final decision expected June 2017

==> picture [659 x 174] intentionally omitted <==

----- Start of picture text -----

Bi-directional flow on Roma Brisbane Pipeline
----- End of picture text -----

70

Victorian transmission system access arrangement

==> picture [104 x 42] intentionally omitted <==

• Next access arrangement period 1 January 2018 – 31 December 2022

• Revision proposal due 1 January 2017

• Preparation of proposal is well advanced

• AEMO forecasts some reduction in gas demand in Victoria

• However, APA experiencing high demand for gas flows from Victoria into NSW and Queensland

• $230m investment during current access arrangement period to support increase of 160TJ/d flows north

• AEMC Victorian market review and the GRMC process not expected to affect next access arrangement

• Will depend on timing and nature of policy decisions and implementation dates

==> picture [207 x 27] intentionally omitted <==

----- Start of picture text -----

Winchelsea compressor station
----- End of picture text -----

71

questions?

thank you.

==> picture [134 x 53] intentionally omitted <==

For further information contact: Name Yoko Kosugi Title Head of Investor Relations Tel +61 2 9693 0049 E-mail yoko.kosugi@apa.com.au

Or visit the APA website at: www.apa.com.au

==> picture [114 x 14] intentionally omitted <==