APA Group (APA) Status Update summary

Project overview and partnership structure

• Signed a joint development agreement with CS Energy to develop and own the 400 MW Brigalow Peaking Power Plant in Queensland, with an 80/20 ownership split favoring APA.

• The plant will provide firming capacity for peak electricity demand, supporting renewable integration.

• APA will fund its share from the existing balance sheet, with no equity raise required, and the project is part of a AUD 2.1 billion organic growth pipeline.

• A 25-year inflation-linked hedge-offtake agreement with CS Energy will underpin returns, with a small variable revenue component.

• Orders for long-lead equipment, including 12 GE turbines, have already been placed, expediting project delivery.

Financials and funding

• Total project cost is expected to exceed AUD 1 billion, with APA responsible for 80%.

• An additional AUD 150 million will be invested in a lateral pipeline and storage facility, secured by a 35-year agreement.

• Returns are expected to exceed APA's hurdle rates and align with previous guidance of 150 basis points above WACC.

• The project is structured as a tolling arrangement, minimizing exposure to wholesale electricity prices.

• Cash payback is targeted within the first half of the asset's 35-year accounting life.

Operational and contractual details

• CS Energy will operate and maintain the plant, leveraging its existing site and workforce, while APA retains significant governance rights.

• The construction management agreement is being finalized, with most CapEx tied to pre-ordered turbines.

• The asset will be depreciated over 35 years, with value remaining on the balance sheet after the 25-year contract.

• Recontracting is expected after the initial 25-year term, given the ongoing need for gas-powered generation.

• The project is expected to be commissioned around 2028, with early funding already underway.