Apa Group · ASX:APA
Apa — Australian Pipeline Trust — Investor Presentation (October 2003)
34 slides from Apa's investor presentation, Oct 21, 2003
Slide 1: OU DHUM COM UAUNES Woe cada Nie METIS ROL RNA ARN et ety UO
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Slide 2: Agenda
Agenda m Results and Operating Review m@ Strategic Issues m Acquisition Opportunities m@ Regulatory Environment m Gas Supply to south east Australia m= Growth and industry rationalisation Australian Pipeline Trust O-
Slide 3: 2003 Net profit after tax
$M 41.05 40.0 - 37.1 30.0 - 2003 Net profit after tax: +10.63% from pcp. 20.0 - 10.0 - 2002 2003 NPAT (after minorities) —acctraian Pipeline Trust O-
Slide 4: Results in Summary: Full Year Revenue Breakdown
| Results in Summary ' Full Year Revenue Breakdown | $M Total Revenue 300 255.4 271.9 a 250 7" c—— # Other Revenue 200 - “ Other Pipeline Revenue 1 50 7 @ Pipeline Revenue-SCP Equity Contribution 1 00 7 @ Pipeline Revenue - Transportation 50 - 0 = Australian 2002 2003 Pipeline Trust O-
Slide 5: Results in Summary: Revenue by Pipeline
Results in Summary Revenue by Pipeline $M 100 GGT + MSP, AGT & GGT include passthrough revenue 1044 102 MSP AGT RBP m™ 2003 MSP - Moomba to Sydney RBP - Roma to Brisbane CGP - Carpentaria Gas AGT - Amadeus Gas Trust GGT - Goldfields Gas Transmission MWP - Midwest Pipeline 264 o44 CGP GGT MW P M2002
Slide 6: Results in Summary
Results in Summary Year ended 30 June 2003 2002 “Change $M $M EBITDA 137.81 132.22 4.2 Depreciation & Amortisation 24.1 26.3 8.4 Net Interest Expense 48.6 46.8 3.8 Profit before Tax 65.13 59.1 10.21 Tax 23.8 21.7 9.58 Minorities 0.3 0.3 - Net Profit after Tax 41.05 37.1 10.63 Earnings per unit (cent
Slide 7: Results in Summary: Cash Flow
Results in Summary _ Cash Flow Year ended 30 June 2003 2002 $M $M Net cash flow from operating activities 90.59 85.09 Net cash used in investing activities 41.04 48.78 Distributions to unitholders 52.46 51.63 Australian Pipeline Trust O-
Slide 8: Full Year Distribution Maintained
Results in Summary Full Year Distribution Maintained Cents per unit 2003 2002 2001 Total Distribution 21.5 21.5 21.0 Income Distribution 17.0 15.5 12.5 - Franked Component : - 1.83 - Unfranked Component 17.0 15.5 10.6 Capital Distribution 4.5 6.0 8.5 # Income component steadily increasing - now 79%
Slide 9: Operational Review: Moomba to Sydney Pipeline
|) Operational Review Moomba to Sydney Pipeline m Agreement with AGL to transport increased volumes of gas in Moomba to Sydney (MSP), above those already contracted beyond 2006. Australian Pipeline Trust O-
Slide 10: Operational Review: Queensland
Operational Review ' Queensland m@ Roma to Brisbane Pipeline — Looping stage 6, commissioned October 2002. — Innovative and interruptible firm haulage contracts with existing customers. m@ Carpentaria Gas Pipeline — Additional compressor, commissioned December 2002. Australian Pipeline Trust O-
Slide 11: Operational Review: Western Australia
> Operational Review ' Western Australia m@ Acquisition of minority interests in Goldfields Gas Transmission Pipeline in April 2003 — now an effective 48.5%. m Midwest Pipeline running on reduced throughput — temporary shutdown of the vanadium mine at Windamurra. Australian Pipeline Trust O-
Slide 12: Governance Arrangements
| Governance Arrangements m@ Currently unitholders do not have right to elect directors of Australian Pipeline Limited. m@ Proposal to give unitholders power to elect directors other than: — two directors nominated by AGL — one director nominated by Petronas m@ Best practice - enhances unitholders’
Slide 13: Strategic Issues
© Strategic Issues | = To continue to grow profitability, APA needs to: — expand its asset base — increase capacity — diversify its business mix : = Northern gas to south east Australia. m@ Regulatory reform. Australian Pipeline Trust O-
Slide 14: Diversifying & Growing our Asset Base
Strategic Issues | Diversifying & Growing our Asset Base as Moomba to Sydney Pipeline (MSP) provides 37% of total revenue of APA. __ @ Focus on strategies to improve the contracted position of the MSP beyond 2006. i Continue to lift throughput in our Queensland and Western Australian pipelines. - m@
Slide 15: Acquisition of new assets and minorities
» Strategic Issues ' Acquisition of new assets and minorities @ EPIC Energy - sales process commenced Epic West — Dampier to Bunbury Pipeline Epic East — South West Queensland Pipeline — Moomba to Adelaide Pipeline — South East Pipeline — Pilbara Pipeline System _ m Duke Energy pipeline assets may b
Slide 16: Improving APA's Ability to Raise Equity
' Strategic Issues | Improving APA’s Ability to Raise Equity ' ® Distribution Reinvestment Plan — Newuhits issued at a 2.5% discount to market — No brokerage or other fees are payable. | @ Equity Raising Options — Placement via bookbuild — Rights issue — Jumbo placement — Combination of any of the a
Slide 17: Complementary Assets
>) Strategic Issues _ Complementary Assets '. @ Power Generation | w Gas production infrastructure including compression metering and drying plants. _ @ Other pipeline transmission assets: — Oil pipelines — Water pipelines. Australian Pipeline Trust O-
Slide 18: Gas Supply to South East Australia
"Gas Supply to South East Australia : m@ Do we have the appropriate settings? 8 Why isn’t there more gas producer on producer competition? | = The nation needs a cohesive national energy policy and workable regulatory regime. Australian Pipeline Trust O-
Slide 19: Regulatory Review
| Regulatory Review m ACCC final decision on our Moomba to Sydney Pipeline disappointing. m@ Minister’s decision on revocation still pending. @ Review of the National Gas Access Code due June 2004. Australian Pipeline Trust O-
Slide 20: Australia's Leading Transporter of Natural Gas
Australia’s Leading Transporter of Natural Gas Australian Pipeline Trust O-
Slide 21: LUPE SONS ULB S I RILIR C
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Slide 22: Estimated Australian Gas Reserves map
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Slide 23: Gas Supply to South East Australia: The Debate
Gas Supply to South East Australia _ The Debate m@ Australia has an abundance of natural gas, but not close to existing markets. m@ ABARE study indicates shortfalls in supply from existing gas fields by early next decade. m Customers are concerned about availability and prices from existing gas supp
Slide 24: Gas Supply to South East Australia: Options
Gas Supply to South East Australia ' Options m= Coal Bed Methane is an emerging viable alternative - provides short term relief. m@ Gas from the Otway basin and Gippsland - only part of the solution. @ Timor Sea gas development - unlikely to have sufficient commercial gas supplies for domestic Austr
Slide 25: Papua New Guinea Pipeline Project
Gas Supply to South East Australia __ Papua New Guinea Pipeline Project 2 PNG producers continue to aggregate a market for their gas. - m= Proposed pipeline to services south east Australian markets via Mt Isa, Moomba and Central Queensland markets. m= Potential delays due to complexity of project.
Slide 26: North West Shelf Gas
North West Shelf Gas = W.A Producers and Government beginning to | canvass this option. | @ Trans-continental pipeline will have focus should PNG Project not proceed. Australian Pipeline Trust O-
Slide 27: Regulatory Environment
Regulatory Environment Review of existing Regulatory Issues m@ APA is still awaiting Minister's determination on coverage of the Moomba to Sydney Pipeline. | m ACCC final determination has little impact on Moomba to Sydney Pipeline until after 2006. m ACCC final determination differs from APA submis
Slide 28: Regulatory Environment
» Regulatory Environment | Review of existing Regulatory Issues m National Competition Council recommends that Queensland State Agreement is “not effective”. @ QLD tariffs regulated by State Agreement. @ Existing contracted arrangements on Queensland pipelines at risk. m Both the Queensland Governme
Slide 29: Review
Review m= Regulatory regime is affecting the gas industry and dampening the development of “greenfields” projects. | = Review of the Gas Access Regime by the _ Productivity Commission is welcome. = APA and industry representatives will be lodging submissions. @ Final report is due in June 2004. Aust
Slide 30: Growth Strategy
) Growth Strategy - im APA seeks growth from four areas:- — incremental growth on our existing pipelines. — acquisitions of minority interests in our pipelines. — acquisition of other pipelines through industry rationalisation. — investment in complementary businesses. Australian Pipeline Trust O-
Slide 31: Growth Strategy: Incremental Growth
' Growth Strategy Incremental Growth __ @ Natural gas demand continues to grow at over 3% annually. / m@ APA actively markets in Queensland, Western Australia, _ Northern Territory and on the Moomba to Sydney Pipeline. _ @ APA seeks opportunities to position natural gas as an ___ alternative to coal
Slide 32: Acquisitions
» Acquisitions | li Minority Interests — Minority interests in Goldfields Gas Transmission considering a sale. _ @ Industry rationalisation - Epic “first cab on the rank’. _ @ Greenfields - Australia requires a major new pipeline to bring northern gas to the south east. m= New pipelines mitigates fu
Slide 33: Summary
Summary _ @ APA has major challenges in the future. | Gas supply to south east Australia must be addressed. | _ @ Productivity Commission Review is important. m APA is actively involved in the emerging industry rationalisation. | APA focused on profitability and growth strategy. © @ APAwill continue
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Australian Pipeline Trust — Investor Presentation (October 2003) on 6ix