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APA Group (APA) investor relations material
APA Group Status Update summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.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.
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