APA Group has announced an increase of 40.5 per cent in net profit after tax in the first half of the 2016/17 financial year due, in part, to acquisitions and new projects.

Net profit after tax for the first half of the financial year was $139.8 million, up from $99.5 million at the same time in the 2015/16 financial year.

APA Chairman, Len Bleasel said, “APA continues to deliver on its growth strategy of expanding our integrated energy network and enhancing our offering to meet the evolving needs of customers.

“Our commitment to innovation continues through the development of smarter and more efficient services, which are increasingly being taken up as part of our customers’ ongoing contracts with us.”

“The solid result demonstrates the success of our disciplined acquisition strategy. Last year’s acquisitions of the Diamantina and Leichhardt Power Stations and Ethane Pipeline contributed a full period of earnings, as did the Eastern Goldfields Pipeline which was commissioned in November 2015.”

APA Group saw organic growth of four per cent for the half year, after adjusting for full year contribution from acquired assets.

APA Group Managing Director, Mick McCormack, said the result is due to the continued development of assets, and the benefits of operating an interconnected portfolio of assets that enables the flexible, reliable and efficient delivery of services to meet the evolving needs of customers.

“This has only been made possible through years of planning, foresight and investment, in grid enhancement projects, expansion projects, the state-of-the-art Integrated Operations Centre and all the technology and know-how that goes into it coupled with a number of asset acquisitions. These are now delivering the growth in earnings that we expected from each investment,” Mr McCormack said.

On the east coast of Australia, customers are are able to connect to the multiple services available on APA Group’s interconnected assets. With the renewal of a legacy contract on the Moomba Sydney Pipeline in late 2016, the majority of significant gas transportation contracts on APA’s East Coast Grid are now multi-service and multi-asset agreements.

In Western Australia, the Eastern Goldfields Pipeline contributed a full six months’ earnings for the period, compared with two months for the previous corresponding period. Additional contracts for the Mondarra Gas Storage Facility and increased wind resources at the Emu Downs Wind Farm also improved the Western Australian results.

In the six month period, APA Group has spent a total of $162.7 million in capital and investment expenditure with $36.5 million of this related to its share of the Mortlake Pipeline acquisition by the SEA Gas (Mortlake) Partnership.

APA’s growth capital expenditure continues to be either underwritten through long-term contractual arrangements or have regulatory approval through a relevant access arrangement.

A number of projects have also been announced that will see APA Group continue to invest in growing capacity either through pipeline expansions or other energy infrastructure assets for our customers.

These all contribute to the $1.5 billion in growth capital expenditure over the next three years. The projects include:

  • Continued work on the Victorian-Northern Interconnect expansion project
  • Moomba Interconnect project which has increased the efficiency of the operation of APA’s East Coast Grid 
  • Construction of the Reedy Creek Wallumbilla Pipeline, a 50km, bi-directional pipeline connecting the Australia Pacific LNG Pipeline with the Wallumbilla Hub, at a total cost of approximately $80 million
  • Construction of the Emu Downs Solar Farm, a 20MW solar farm with a 13-year power purchase agreement with Western Australian energy provider, Synergy, at a total cost of approximately $50 million, $5.5 million of which will be funded by a grant awarded from the Australian Renewable Energy Agency
  • Preliminary studies for the construction of the 450km, $500 million, Western Slopes Pipeline, connecting the Santos’ proposed Narrabri Gas Project to APA’s East Coast Grid. This project remains subject to various approvals and a Final Investment Decision for the Narrabri Gas Project itself
  • The development of the 130MW Badgingarra Wind Farm at a total cost of approximately $315 million, underwritten by a 12 year power purchase agreement with Alinta Energy with commencement of operations targeted for January 2019

“Continued investment and innovation in energy infrastructure is critical to nation-building and is essential in providing access to reliable, secure and affordable energy,” Mr McCormack said.

“It is becoming widely acknowledged that gas is an essential fuel in Australia’s energy mix. However, in order to move towards a cleaner energy future, our energy system needs to undergo an overhaul, which involves having some difficult but necessary conversations between government, industry and consumers.  

“Australia’s gas market is one of the most successful economic models globally. It has encouraged investment in and development of assets to meet customer demand through bringing more gas to market, when and where it is needed.”

The gas market on the east coast has been transformed by the commissioning of the three east coast export LNG projects. This has led to a dramatic change in the demand for gas. To support the increased demand, there will need to be ongoing investment in developing additional resources as well as connecting them to the market.

“APA’s focus will continue to be on delivering energy safely, efficiently and in a sustainable way. We will continue to do this through investing in our assets, systems and people to support growth and the evolving needs of our customers.”  

CONTACT US

We're not around right now. But you can send us an email and we'll get back to you, asap.

Sending

©2018 utilitymagazine. All rights reserved

Log in with your credentials

or    

Forgot your details?

Create Account