Good morning to everyone, and thank you for joining this webcast of APA’s Half Year Results for Financial Year 2020. I’m Jennifer Blake, Head of APA’s Investor Relations team. Today, we have APA’s CEO and Managing Director, Rob Wheals who will present the interim’s results and outlook with APA’s CFO, Peter Fredricson, who will provide more depths on the financials. A Q&A session for analysts will follow the presentation. For any media on today’s call, time has been separately set aside for your questions and interviews following the webcast. I’ll now hand over to Rob.

Good morning, and welcome to APA’s financial year ‘20 interim results calls. With me today are members of my Executive team. As I introduce the team you may note some title changes as a result of the recently completed review of APA’s operating model. I’ll talk about the review and outcomes in more detail during today’s presentation. In the meantime, in the Sydney office with me today is Peter Fredricson, APA’s Chief Financial Officer, who will present the numbers in more detail. Nevenka Codevelle, Group Executive Governance and External Affairs; Kevin Lester, Group Executive Infrastructure Development; Darren Rogers, Group Executive Operations; Elise Manns, Group Executive People, Safety and Culture and Craig Stallan, Acting Group Executive Strategy and Commercial. Ross Gersbach, who’s looking after North America Investigations he’s in Houston, is not with us on the call today. Peter and I will take you through the half year results and business highlights leaving time at the end for analyst questions. If you have any follow-up questions that we don’t get to please contact the Investor Relations team whose details are included in today’s presentation pack. A hallmark of APA’s success over 20 years has been being on the front foot when identifying growth opportunities. This strategic approach underpinned our largest investment program of $1.5 billion over the last three years and we have seen the benefits to our customers, our business and security holders coming through in this half. During the half, earnings before interest tax, depreciation and amortization increased 6.9% to $842.2 million and operating cash flow has increased 8.9% to $511.9 million. This result was largely due to our new growth assets contributing $38.3 million of EBITDA. These solid numbers stand us in good stead for EBITDA to meet the FY20 guidance range of $1.66 billion to $1.69 billion of EBITDA. We continue to invest in Australian energy infrastructure investing just over $1.45 million for the reporting period in growth CapEx in addition to investment in the Orbost plant there was raft of expenditures on other growth projects all of which will contribute to meeting our customers energy needs and advancing Australia’s energy sector. Corporate cost for the half has reduced period-on-period despite the growth in EBITDA to give you an idea of our corporate cost discipline our EBITDA has more than doubled since first half financial year 2015 to six years ago, but our corporate cost has remained relatively stable over the period. Peter and his treasury team also refinanced around $389 million of higher cost debt at lower rates and for a longer term which helps reduce our borrowing cost. Today the board declared the interim distribution to be $0.23 per security this represents a 7% increase on February, 2019 interim distribution with an additional 3.65 cents per security of franking credits to be attached. Operationally, it’s been a busy first six months with many positives including the commissioning and official opening events for some of our newest assets. Importantly, consistent with our customer promise our integrated operation center has reliably delivered customer’s guest nominations 99.9% of the time during the reporting period. In terms of new assets, I’ve had the pleasure of attending a number of openings for our new assets across the country, a very proud moment as a CEO. Not only do you see first half the amazing engineering feet achieved usually in remote locations and challenging environment and the pride in the team that build them, but you also hear directly from the customers about what this asset will do for their business and ultimately for the customers. In Queensland, we celebrated the opening 110 megawatt Darling Downs Solar Farm with our customer Origin Energy and [indiscernible] WA we officially opened the new Yamarna Gas Pipeline and Gruyere Power Station assets. The pipeline and power station together ensure that the Gruyere Gold mine has a reliable 24/7 power source. We also open the Badgingarra Solar Farm in WA, which is the latest addition to APA’s 250 megawatt renewable energy precinct. We operate and build our assets for our customers and they are at the center of everything we do. During the period we put a lot of work into further progressing customer focus initiatives and turning those commitments into meaningful and effective actions. We’ve improved our communications, timing of planned and unplanned maintenance events, introduced better complaints handling processes and solved inputs from customers as part of our decision making processes. Our efforts were detailed in APA’s first energy charter report to the Independent Accountability Panel who delivered their findings for the group of 19 industry signatories in early December. APA is actively involved in the energy charter wait [ph] energy industry participants are working together for the common good of the end customer. On the regulatory front, we submitted APA’s responses to the two regulatory impact statements for which process is currently underway. Looking at gas pipeline regulation and gas market transparency. In this regard, APA recommends a hybrid option for the regulatory framework including retaining the negotiate arbitrate model and simplification to two classification of regulation, heavy regulation and a lighter regulation based on Part 23 and therefore we support removal of the current light regulatory framework. We’ve successfully demonstrated since the introduction of Part 23 that by listening to our customers and providing them with energy solutions that they are looking for, that they do not seek to invoke the arbitration process. In the instance however, if a customer did want to invoke the arbitration process we have advocated in our [indiscernible] submission for the retention of a commercial arbitrator and limited cost exposure for the benefit of the customer. In addition we’re working with stakeholder and the energy charter better together initiatives to co-design further information that is useful to all stakeholders. The submissions are now subject to review period and we expect a published outcome during financial year 2021. In response to the catastrophic bushfires across Easter Australia we made immediate cash donations to various appeals and have further pledged to match employee donations. In addition as part of our community commitments over in the Dandaragan Shire in Western Australia where our renewable precinct is located, we donated a state-of-the-art fire truck when we officially opened our newest asset in that region, the Badgingarra Solar Farm. It was a very proud day for me as a CEO We are part of many other communities impacted over the summer period by the bushfires and we’re working with these communities to determine how we can get help to them and get them on their feet. Moving to Slide 6, this photo of APA’s Orbost Gas processing facility was taken last week. The facility has been under the control of our operations team since late December, 2019. Completion of the site has run late in the May due to delays with the construction contractor. This was further compounded over the summer period by the East Gippsland bushfires. The site was evacuated on a number of occasions late December, early January due to the severe fire risk and activity in the region. And subsequently due to the smoke and poor air quality that followed the fire threat. Fortunately there was no direct impact on the safety of our people or the asset itself as a result of the fires. Importantly, all approvals and required consents to commence operations are in place. The gas engine generators have been successfully commissioned over recent weeks, gas was safely introduced into the plant from the Eastern Gas Pipeline yesterday and raw gas from Cooper Energy, Sole gas field is scheduled to be brought into the plant, by late February. Commencement of commercial operations is therefore scheduled for March. We are obviously very disappointed by the delays that have impacted our customer from commencing their operations and delivering gas to their customers. We’ve kept Cooper Energy regulatory up to date so they can make appropriate decisions and announcements to manage their business and their customer’s expectations. Our focus on site has been bringing gas safely into the plant, so that the starter process can be commenced and the site reach full operational capability. Safety first is foremost at ABA, we won’t put our people, communities, environment all the safe operations of our assets at risk purely to meet deadline. And as I’ve just talked about Orbost is a good example of that playing out. I’m disappointed at the TRIFR metric of 7.37 which tells me we’re still having too many injuries no matter how minor they are. While our employee TRIFR is headed in the right direction, there’s still more work to do to get our many networks contracts up to the same level of safety. We’ve stepped up the contract to management process or focus with end-to-end reviews of the contractor engagement process beginning at procurement level right through the company safety standards and performance. From a whole of company perspective, we’ve recently set the health, safety and environment strategy for the next three years to financial year 2022 [ph]. We have six key themes as you can see on the slide and contractor management is one of those key focus areas. I look forward to presenting a better, safety result going forward. On the environment front, we’ve been actively engaging with stakeholders on a raft of issues to ensure we prevent or minimize our impact on the environment. APA recently received the 2019 Australian Pipeline and Gas Association’s Environment Award for the Development of Site Planning and Landscape Guidelines. These guidelines are an industry first and proactively engaging with developers in Greenfield growth areas as well as local planning authorities to enhance the functionality of pipeline easements from an environmental perspective. On the previous results call in August, I’ve outlined a list of my priorities for the financial year ‘20 year ahead. So I thought it pertinent to give you an update on how my to-do list is tracking given we’re halfway through the year already. I’m pleased to update that we’ve now completed the operational review of APA’s vision, purpose, culture operating model and we’re well into the implementation stage. I’ll take you through some of the detail after Peter presents financials. But briefly my review was 360-degree process and look at our business fundamentals. The aim being to ensure our operating foundations supported APA’s future plans and strategy within a dynamic operating environment. Importantly, APA’s strategy has not changed but given the changing operating environment and more agile operating model is required to continue to successfully deliver on that strategy into the future. The focus has been to clarify accountabilities, enable our people to make decisions at the right level and ensure we have the right skills and resources to deliver on our strategy. I’ll now hand over to Peter to go through the financials in more details.

Thanks Rob and good morning, everyone. As Rob has already noted this result is generally in line with the guidance that we gave to the market in late calendar 2019 and certainly it seen the benefits flowing through from the commissioning of number of new assets and expansions headed over the last two years or so. Growth in EBITDA has come primarily from those new assets as CPI increases on established contracts on the large asset portfolio have largely been offset by the effects of a higher exchange rates on Wallumbilla Gladstone Pipeline reviews as disclosed in the financials last year. The interest expense is largely up due to lower capitalization of interest in the half, the overall rate payable across the debt portfolio dropped in from 5.53% at 30 June, 2019 to 5.35% at the half year. Operating cash flow per security continues to grow as we fund our organic growth projects with operating cash flow retained in the business. This growth in operating cash flow has once again enabled us to increase distributions for the half and maintain guidance at $0.50 per security for the full year. As we continue to build on the grid light nature of our business and to-date primarily on the East Cost, we’ve had an East Coast grid. But laterally we’ve developed more of a West Coast Grid to add to the East. We look at the results based on those grids due to the multi-asset, multi-service nature of our business. On the East Coast the overall result of EBITDA being some 0.7% down the on the previous corresponding period has driven primarily by the higher exchange rate used to convert Wallumbilla Gladstone Pipeline revenues. At 0.7196 for the half versus 0.6717 a year ago, absent that impact they would be a 2% increase year-on-year across the East Coast grid primarily representing a CPI increase of in the order of 1.5%. The northern territory was somewhat affected by the sharing of third-party revenue with a foundation shipper and the West Coast was driven by the commissioning of a number of new assets including Yamarna Gas pipeline, the Badgingarra Wind Farm, the Badgingarra Solar Farm and the Gruyere Power Station. Asset management benefitted from ongoing growth in the networks businesses that we operate for third parties and [indiscernible] received for outperformance of those assets. Investment returns have grown across the board but particularly out of SEA Gas where we continue with our 50-50 joint venture partner to fully fund the business and earn greater returns as a result. Corporate costs are impacted by the removal of last year’s one-off expenses, but increasing cost of regulatory compliance and from a business that continues to grow we’ll see corporate cost going forward at a run rate of around the current half year level. I’ve spoken already about the impacts of the majority of waterfall amounts depicted here. Of note though, is the reduction period-on-period in variable revenues as more firm contract capacity sees our variable revenues drop below the historical average of closer to 1% of revenues. This outcome is primarily a result of maturing of the market as customers settle contracts for firm capacity based on their historic usage more than looking to use spot services that we are generally unable to guarantee on a daily basis. This plays out further in the increasing net contract expiry and renewals with customers re-contracting for services or contracting for new services that replace variable revenue services in the longer run. The one thing this result does is confirm the low risk business model that we operate; nothing is changed in that regard. Within excess of 90% of our revenues coming by way of take or pay contracts all from regulated assets. 93% of our revenues come from customers with investment grade credit ratings with close to half of that coming from customers with A minus or better ratings. And we remain focused on delivering services across our diverse customer base servicing the energy, utilities and resources in particular with a small but consistent over the longer term present in the industrial sector. The weighted average contract term on a revenue basis remains above 12 years. In the context of capital expenditure, the vast majority of this first half has being concentrated on completing the commissioning the Gruyere Power Station and Badgingarra Wind and Solar farms in the West and working through the construction and commissioning of the Orbost Gas Processing plant in Victoria. Orbost was expected to be commissioned during the fourth quarter of calendar 2019, but delays with the constructions contract that have taken commercial operations into the first quarter of 2020. Other than this, we have been working on a number of other smaller projects all of which in time will deliver new revenues to APA. We currently have five environmental processes underway for projects that will add to our portfolio once our customers reach their FIDs and approvals are received. These include the Western Service [ph] pipeline and the Crib Point - Pakenham pipeline and the Western Outer Ring Main. All in all, our ongoing discussion with our customers give us confidence that $300 million to $400 million of growth CapEx over the next two to three years guidance that we provide remains appropriate albeit this year is likely to fall closer to the bottom end of that range. Balance sheet remains in good health and we remain confident of our ability - fund growth in a way that will add value for security holders. All of our current organic growth is being funded with operating cash flow whilst we’re also increasing distributions to security holders. The ratings metrics that operate to a get towards ensuring Baa2 and BBB ratings are not put at risk and they give us further future flexibility in respect of funding. Whilst we will always look to fund any significant acquisition within appropriate amount of equity, the growing strength of those metrics is giving us further flexibility in that regard. We’ve repaid around $400 million of Maple Bonds and USPP notes during the period and we’re using our domestic bank facilities currently with no immediate need to issue longer term debt notwithstanding the currently historically low interest rate available to us in offshore markets. The debt portfolio remains diversified across number of markets including shorter term domestic bank facilities and longer term bonds issued in the USPP 144A Euro and Sterling market. We have an Aussie Dollar MTN due for repayment in July 2020, but at this stage we expect to use our shorter term domestic facilities to deal with that. the longer term markets remain open for us should we see the need to fund current maturities into longer term markets or shorter and appropriate acquisition present itself going forward. Meanwhile we maintain our distribution policy that effectively says distributions will generally grow in line with growth in operating cash flow, distributions will be sustainable over the longer term and will be fully covered by operating cash flow. We will look to maintain funding within the business to support our organic growth and we will take into account economic conditions when determining any level of distribution. In that context, the interim distribution represents an increase of in the order of 7% and we retain our guidance of $0.50 in total distributions for the full year. We will allocate 3.65 cents per security of franking credits to interim distribution given that we’ve paid some $70 million in tax for FY 2019. We expect to be able to allocate additional franking credits to the final distribution for FY 2020 based on the expectation that cash tax impose for the FY 2020 year should be around $90 million. As we’ve already noted we expect EBITDA for FY 2020 to deliver within the guidance range of $1.6 billion to $1.69 billion albeit at the lower end of that range due to the delays with the commission of Orbost. Just in aside, notwithstanding those delays we remain comfortable with the returns that we will earn on that asset and we will not lose any revenues over the life of the Sole field as Orbost will process all gas extracted from that field on behalf of our customer, Cooper Energy. We fully expect interest expense to be at or even a little below the bottom end of the guidance range of $505 million to $510 million and as noted previously, we expect that the full year distribution will end out at around $0.50 per security or at $0.50 per security. With that, I’ll hand back to Rob. Thanks very much.

Thanks Peter. So, let me elaborate on what underpins our confidence in our continued growth strategy. I’ll address the broader market and then drill down to what this means for APA and ultimately how on the operating model and purpose and vision, fits into it all. Worldwide total energy demand is expected to increase materially through 2040 under the International Energy Agency current policies that forecast is about 34% from 2018 levels. And also, under the stated policy scenario and there it’s about 24% from 2018 levels. Under those same scenarios worldwide natural gas usage is forecast to increase at greater levels to energy demand at that’s about 49% and 37% respectively as natural gas continues to grow as a critical part of our energy mix. Under the IEA sustainable development policy scenario which assumes that there is a globally concerted effort to meet the Paris Agreement. Energy demand reduces somewhat from 2018 levels around 7% reduction through to 2040. In this scenario, natural gas usage declined slowly shown by the green line on the chart and overall 2% decrease over the period but less than the total energy demand decline. Even so, it is anticipated that $110 billion per annum would be spent on LNG and natural gas infrastructure between now and 2030. Looking at the APAC region in red on the left-hand side, you can see that gas remains are growing in key part of the energy mix in the decades ahead in our region. So, in summary, natural gas continues to play a critical role in our future global energy mix, no matter which future scenario plays out. Looking at the domestic market on the right-hand side chart. You can see AEMO’s prediction of the shortfall in current gas supplies to meet forecast demand over the next two decades. AEMO’s draft modelling forecast that new gas supplies in associated pipeline infrastructure will need to be discovered and developed capable of delivering over 200 petajoules of additional gas to the domestic market each year from 2025 through to 2037, to help meet residential, commercial, industrial gas demand. Gas for LNG export and gas supply for gasified power generation. This represents an opportunity for APA as gas infrastructure will be required to process and bring this gas to market. APA has long been saying we need governments to take their foot off the hose and help with the process of getting more of Australia’s abundant natural gas resources to market. In this regard, I was encouraged to hear recent sentiments expressed by our Prime Minister at his latest National Press Club address regarding accessing Australia’s gas resources at any credible energy transition plan must involve greater use of gas an important fuel. Australia’s Chief Scientist, Alan Finkel said last week that the energy transition will be the biggest engineering challenge ever undertaken and will take many decades. New technologies are being developed, but until they are scalable gas will continue to have a critical role to play in our energy mix. I will now take you through the opportunities that APA has in front of it including while we are well positioned for growth. I’ve split the growth opportunities into four brackets. With the first three focused on domestic growth opportunities. You can see that there is a large pool of potential projects in our backyard. In fact, we have environmental approval processes underway for five major projects that if approved will deliver an excess of $1 billion of growth CapEx over the coming years. as I’ve just talked about on the East Coast more gas supply is needed to meet demand and put downward pressure on pricing. In this regard, you can see a number of new gas supply basin names mentioned on the slide. APA has in place a number of agreements subject to customer financial investment decision and several memorandums of understanding that would help bring these new gas supplies into the East Coast market. The quickest way to get new gas to market is to connect to existing infrastructure and APA’s 7,600 kilometer East Coast grid has the extensive reach across Eastern Australia. In the West of the country demand has been driven for new infrastructure for new and existing mine seeking a reliable supply of gas as a fuel source. The more we develop interconnected infrastructure like the Goldfields and Eastern Goldfields Pipeline grid. The more interest and demand we get from these customers by the existing and new. So, there’s opportunity to expand the pipeline infrastructure both in terms of capacity and footprint. APA has already assisted many of its customers such as Origin, Alinta and Synergy with adding renewable into their energy portfolio through the Darling Downs Solar Farm, Badgingarra Wind Solar Farms and Emu Downs solar facilities adding to the existing wind farm. And we’re investigating and investing in new energy technologies such as hydrogen energy and renewable methane. During the reporting period, Dandenong Power Station project was shortlisted by the government as one of the first two projects to be selected to proceed to agreement of key terms under the Underwriting New Generation Investments or UNGI program. We continue to work with the government on progressing the key terms as well as working with potential customers. Our North America due diligence actively continuous with Ross Gersbach now based in Houston. It’s a well-known fact increased gas usage in the US has lowered their overall carbon emission level and as a result of the vast supply of available and affordable gas. Gas is a critical part of US energy mix and more investment in gas infrastructure continues to required, so it makes sense for us to be looking at this market. We have articulated previously what we’re looking at and why we are looking in a market outside of Australia and none of that detail has changed, what has changed is that Ross as a senior representative of the business is now on the ground looking at opportunities for us. If we don’t find what we’re looking for, we won’t progress and that timeframe will be determined at an appropriate time in the future. Needless to say, currently we do not have a definitive timeframe. Looking now at the organization review that was undertaken over the last six months and what’s come out of it. On the slide you’ll see APA’s refreshed purpose and vision and some highlighted keywords of responsible energy and world class. I indicated at the financial year 2019 results that I would undertake a review of APA’s business fundamentals the aim being to ensure our operating foundation supported APA’s future plans and strategy within a very dynamic operating environment. The review covered APA’s purpose which is our reason for being a vision, our aspiration, our culture. How we do things as well as APA’s operating model. Importantly as I’ve stressed before APA’s core strategy has not changed. APA’s purpose now includes the words responsible energy and by that we mean doing the right thing even in tough situations creating value for all of our stakeholders, taking a long-term view and being there for future generations, investing in new technologies and new energy and innovating for sustainable future. Our vision is to be world class where we are known for high integrity and credibility, leadership in responsible energy, customer focused, operational capability where people are proud to work and making a positive impact in our communities. As discussed at APA, we’re holding ourselves to world class standards in the provision of infrastructure and services and have reorganized our operational model to support these efforts. I’ve streamlined APA’s operations to support collaboration on customer service and outcomes and to reflect our portfolio approach to our energy assets. The new group executive team that are put in place supports this philosophy. There are probably three noticeable changes. The old networks and power generation function has been merged with transmission into the single group under operations headed up Darren Rogers. Operations will oversee the safe and efficient operation of all of APA’s energy infrastructure. With Ross vacating the strategy role to take up his position in Houston. I’ve also grouped together all of our strategy and commercial functions to support our promise to our customers of delivering services at their value. The structure ensures we provide a single simpler touch point at our end and an executive recruitment process is well underway to head this function. The transformation and technology function is new and is about ensuring APA effectively responds to the disruptive forces and opportunities that decarbonization, decentralization and digitization will present and be at the forefront of this rapidly evolving environment. An external recruitment process is also underway for this role. Across the other existing functions, we’ve bend strength [ph] particular areas such sustainability, stakeholder and community engagement to reflect their growing importance within our business. APA’s longstanding CFO, Peter Fredricson announced his intention to retire during this year. I’ve had the privilege with Peter in his CFO capacity at APA for at least 10 years and he’s truly the steady pair of hands on the financial rudder of the APA ship. Our recruitment process has also commenced for this key role and I thank Peter for accommodating a smooth transition over this calendar year. So, in summary, a new operating model is about streamlining our operations to deliver on our promise to customers as well as our strategy for the benefit of all our stakeholders. So, to summarize this morning’s presentation; this half we’ve seen a meaningful uplift in financial performance on the previous corresponding period as the benefits of our largest ever capital expenditure program begins to come through. Increases in revenue and earnings have resulted in increased distribution to security holders. On that basis, we reaffirm our financial year 2020 EBITDA guidance of the range of $1.66 billion to $1.69 billion and the full year distribution expected to be in the order of $0.50 per security plus any additional franking credits that may be attached. I’m very confident in the opportunities that are ahead of APA. We’ve seen continued investment in growth opportunity in Australia as we developed new infrastructure to connect new gas supplies to market. The decommissioning of ageing coal-fired power generation will create significant new investment opportunities and infrastructure including new technologies. We continue to look at the opportunities in North America and the relocation to our Houston office of Ross Gersbach testament to the seriousness of this endeavour. There’s no fixed timeline we will only proceed if it meets our strict investment criteria. We’re pragmatic and based on our experience and expertise in the sector. We know what we are looking for. We don’t find what we are after, we’ll [indiscernible]. In conclusion, APA has a big role to play in positively contributing to a better and responsible energy outcome for all Australians. There’s growing recognition of importance of gas and that more supplies needed to bring down prices and meet the energy needs of Australian in a way that is both reliable and sustainable. We are committed to working with government, industry and particularly our customers to create a cleaner energy future and will play a role and continue to invest in our assets, systems and people. With that we’ll now move to Q&A. I’ll hand back to the operator to facilitate the process.

[Operator Instructions] your first question comes from Rob Koh from Morgan Stanley. Please go ahead.

Thanks very much for the presentation and congrats on a nice quarterly [ph] result. First question, just on one of your growth projects, the Dandenong Power Station. Can you give us the sense of what kind of useful life we should be contemplating for that project, if you manage to get it away? Is it about 30 years plus whatever repowering?

Rob, thank you for your question and thank you for your comments on the result. The Dandenong Power Station, the assumptions we’ll be making will very much depend on what outcomes we achieve with our customers from a contractual point view in our long-term view on the future of energy requirements for firming [ph] in the market.

Okay, no worries. And should we be interpreting the fact that you’re in active discussions with federal government so that maybe helps you a little bit on the broader regulatory front or they more independent processes?

Rob it would be nice to think that does help but I think I’d be viewing these as independent processes.

Okay, cool. All right and so just another question for Peter possibly on Slide 12 with the EBITDA bridge. Can you perhaps just reconcile for us where the small adjustments for AASB 16 to fit into that bridge?

Typically, they fall into the operating cost of the business, so at the end of the day and I’m being quite interested. Some of the notes I’ve seen this morning reflect the fact that we didn’t include the impacts of AASB 16 in our guidance. So, I’m not sure there’s anywhere I’ve seen in terms of our guidance last year that we see it that was the case. I mean certainly we’ve been thinking about AASB 16 for four or five years and we had - since what the impact would be when we released our results in August last year. the guidance that we provided last year of $1.66 billion to $1.69 billion included that and included everything we expected, we hope might happen within the financial year. so just for the two or three papers that I’ve seen out so far this morning saying that we didn’t include that last year in the guidance that’s clearly not the case and apologies for saying that guidance included it because it’s a very immaterial amount from our perspective, we just moved forward without any reference, really so, that’s the only comment I’ve got on that.

Okay, no worries. Peter. Okay. And just last question on your renewable methane project. So I presume if Peter if you’ve approved the budget and it’s not cheap stations, but just wondering if you could talk us through maybe the tentative economics of these projects I guess, if it’s taking CO2 from the air and then producing methane, you still actually haven’t met global warming potential increase from the output, but just wondering if you could give us some color on?

Rob, I’ll answer that question. I think the way we need to think about this, as you’ve said no cheap stations. It certainly wouldn’t pass through past Peter’s desk, if there’s anything other than that. and this is simply a piece of work where we’ll look at, at both the development of hydrogen using energy from renewable energy and then extracting as I think you mentioned carbon dioxide from there creating methane and proving the case that can both technically and then ultimately, economically can be transported in pipeline. It’s a test case and the first step is the technical part and second order is to be able to prove that, it can work both economically on smaller scale, but more importantly on the larger scale going forward.

The only comment I’d make - I’m not sure I’ve been that parsimonious in the past, but never mind. It’s interesting five, six, seven, eight years ago we used to talk about the fact that we were much smaller business and we didn’t have the capacity to do this sort of R&D type of work to really going and look for stuff. I recall buying, we bought the business back in 2012 that we might have liked to have bought earlier but that business was spending $800 million on expanding asset we’re happy to leave that 800 spend on their balance sheet until it was done because we didn’t have a big enough balance sheet to do it. I think we’re in a business today that still in excess of $2 billion revenue annually and in excess of $1.6 billion of EBITDA and living environment where things are changing we have to spend money to think about what is possible and you’ll have seen us allude to the fact that, the run rate and corporate cost is likely to be closer to the half year number going forward and it’s that reason really. We are going to have spent money; we’re spending money in North America with Ross and his team of two doing more than has been in the past. We’re spending month in this area and all of those things are going to add to that as a growing business we’re looking to trying to add things to it and we’re not spending cheap [ph] stations, but we are investing in a prudent way to see what we can do to change the shape of the business over the longer term in front of us.

Great, thanks very much guys. Sounds good, much obliged.

Thank you. Your next question comes from Tom Allen from UBS. Please go ahead.

Good morning, Rob and Peter and the team and congratulations on solid first half results. Couple of questions from me. The first one relates to corporate cost in APA’s new operating model. I note that the first half corporate cost of 38 are a bit high than the first half 2019 after adjusting for those one-offs and you mentioned that the step up was due to higher regulatory compliance and that we should interpret this is the new baseline going forward. I just wanted to clarify whether there were any corporate cost savings coming from the new operational model that might flow through in the next year or two?

Well I mean I’ll pick that up and then maybe Rob will make a comment. The operational model hasn’t been designed to chop costs out to be clear though, the operational model has been designed to give the business a better level of efficiency with the resources that we’re using. We will see as we go forward whether or not that changes or turns into funding more growth with the same resources or in fact, in needless resources going forward. But the driver was not about cutting cost to the business to be clear. We have incurred growing expenditure and regulatory compliance cost is one area where it’s hitting every business in this town from the bank through the businesses like ours. It’s just the fact of business really. And we’re spending money on things like the methane program, like the US etc. so from that perspective I think we’ve maintained corporate cost at a level of around $70 million for a number of years and whilst continuing to grow the EBITDA and the business. I think we sort of just get into that point where we needed to spend a little bit more money to support the ongoing growth and that’s starting to flow through.

Tom and thanks for your comments on the result too. Just to put - edge what Peter said and to emphasize, the new operating model is all being about streamlining and then if they’re and reinvesting in other areas. And I think I mentioned [indiscernible] or bend strengthening some areas like sustainability, community engagement etc. So in short, was never about cutting costs it was about streamlining and then redistributing and investing where we think we need to going forward.

Yes, okay. That’s clear. Peter and Rob. My next question relates to growth opportunities. I agree with you kind of Rob that there appears to be a large pool of them, but they Peter [ph] have a few unique challenges. With regard to Dandenong Power project, can you please describe management’s threshold for merchant exposure to make an FID on that project and impossible timing on FID? And then secondly, you also referred to growth in the LNG import terminal infrastructure just wanted to clarify if that was just the pipelines connecting those terminals to the market or whether you’re also considering owning, operating any of the actual terminal infrastructure itself.

Thanks Tom. Maybe just [indiscernible] point around growth, we are very confident around what we can see in terms of growth opportunity in front of us, talked about the East, the West. The future energy outlook and obviously in North America as well. In regards to Dandenong Power Station like anything that APA’s we applied to subliminal approach and we look for customer or customers and that’s exactly what we’ll be doing in this regard. So, in terms of your question around merchant exposure that’s not APA’s business, where we always look to have a customer or customers working with us on a particular project. In regards to your question around import terminals, we’re engaged in and with as you know with AGL for the Crib point project and obviously in conversations with others as well. Our focus is first and foremost in pipeline, but if there are opportunities develop overtime to invest in some of the other infrastructure, we’ll assist that based on the merits of the time.

Okay, that makes sense. That’s all from me guys. Thanks a lot.

Thank you. Your next question comes from Ian Myles from Macquarie Group. Please go ahead.

I have a couple of mundane questions. The Goldfields Gas Pipeline performed really well. I think it was up by 27%. I was wondering if you could give a bit more color for what drove that. And also, what the implications are for the tariff increase on the rate component going up 9% from the half year.

I’ll provide some commentary and I’d look to Peter to add to it. I think from the tariff perspective there is some history in that that is an adjustment based on, an adjustment year-on-year where the full effect of the regulatory impact was felt one year and once the new tariff came into effected, it was normalized. So, don’t see that as a step up per se, it’s on a normalized basis. You couldn’t see that step up, but in terms of the growth. It’s pleasing that you picked up on that. we’ve had a big focus and we’ve been talking for quite some time about the opportunities in the Western Australian market around other existing mines adding to their energy requirements or new mine seeing that they’re now within proximity of expanded footprint and wanting to add onto that so, so that what you’re seeing is effectively that growth strategy that we’ve had in place for some time playing out and the results [indiscernible] Western Australia.

Just to close that off, the gas that’s growing through the Eastern Goldfield’s Pipeline and now through the Yamarna Gas pipeline and to also Mount Morgans through the Mount Morgans Gas Pipeline which are all off the Goldfield’s Gas Pipeline that gas got to come through that GGP, it’s coming from up north to get there and so what you’re saying as we’ve commissioned the Yamarna Gas pipeline in particular in this, in the half, that’s where that gas is coming from and that’s what driven increased output from the GGP.

Okay. That’s great. And just on that, you’re hearing a lot of miners adding solar batteries, maybe not build some batteries into their system. How does that influence that growth outlook for the pipeline? Is that moderating a bit of it? Or is it not really having an impact?

Ian, it’s an interesting question you ask, clearly a lot of the miners all are looking at portfolio approach to energy and that’s impart why you see the operating model changes that we’ve made to ensure that we’re bringing together all of our operations and running that as a portfolio and how we face off to our customers without single strategy and commercial touch point. so what we’re finding is many of these miners are looking to have some form of renewable as part of the portfolio and energy mix, but as well all know the capacity factor on solar might be in the order of 30% and they could run at 24/7 operation and that’s where gas comes into play.

The other thing to add to that Ian is that, what we’ve shown over again a long period of time, is that working with customers we can deliver them different forms of energy. We’ve done with Origin who are significant gas customer in the East and now we’ve delivering them solar energy through Darling Downs we’ve done it in the West where we had for a number of years the Emu Downs Wind Farm where the customer is Synergy Energy and we’ve added the solar farm there for them again and two assets at Badgingarra both solar and wind for Alinta one of our larger customer. So there’s nothing to stop us and indeed, what we have our commercial people doing is talking to our customers about those very outcomes, so why wouldn’t we be delivering gasified electricity to a customer and also offering to provide them with that solar solution, if they want to green up their energy source in some way. So, from our perspective our commercial guys are out there talking about those sorts of things to customers and yes, don’t be surprised if you see us announcing a solar farm for a particular customer that we are already delivering gasified electricity too.

Okay. And then one final question on the US I appreciate the process is starting. Have you had any sort of - have you gone through any auction process as such yet? Or are you still more in that discovery phase because you’ve been doing it for a little while.

Ian, as you know with financially 2019 results, I indicated that I had asked Ross to go and take up residence in Houston and he was in the ground. I think something like the end of September because it really six months in the exploratory stage and that’s an important part of the work that we do as you know we’ve always taken a very disciplined approach to how we look at things and the US is a big market. So that was a long end and the short answer is, no we’re still at that exploratory stage.

Okay, that’s great. Thank you very much.

Thank you. [Operator Instructions] your next question comes from James Byrne from Citigroup. Please go ahead.

I have a couple of questions, this on the guidance and the outlook and let me caveat my two questions by saying I think you got a commendable track record on delivering against new guidance. Firstly for FY20 EBITDA where you’d mentioned here on the call that you expect to come in at the bottom end of that range were there other drags on your guidance aside from Orbost that were unexpected?

I think the answer to that is, there’s always stuff in a business that happens on a day-to-day basis that you might not expect. We try to consider everything that might happen in a given year and 1.66 to 1.69 is a $30 million swing. So in the context of losing a quarter, as much as a quarter plus actually of revenues from one particular assets to actually delivering with the range in that context is probably not a bad outcome. You might have expected that having lost more than a quarter of revenue given that we’re talking about delivering revenues out of Orbost in March, as there’s gas now in the planet. You’re talking about a quarter more than we expected because we were talking about Orbost contributing in the fourth quarter of last year. So in that context you might say well, if you can deliver within that 1.66 to 1.69 range it’s only $30 million and you’ve lost three, maybe four, maybe more months of revenue from a project like Orbost. You’ve actually had some upside that’s coming to the thing and deliver to get you into that level to outcome. So from our perspective there’s lots of stuff that plays on this. As I’ve said, I’ve seen a couple of papers this morning to see we didn’t add $15 million in there from which is a full year number from AASB 16 I mean that’s always been in there. So the 16.90 [ph] was never going to be improved by AASB 16. The 16.60 [ph] was never going to be let down by AASB 16. So from that perspective there is a lots of stuff that play.

Got it. Okay, that’s clear. Secondly just on this potential for $1 billion of CapEx over the next two to three years. Can you perhaps help us understand how the market or to think about the risk associated with that? again acknowledging you’ve done well relative to your guidance in the past, but as I look through the opportunity set things like the Western Slope’s Pipeline I’m not necessarily convinced that’s the pipeline route that Narrabri will end up choosing for example if and when it adds second phase of drilling.

James, the way we sort of think about this as, as you probably heard us both Peter and I speak before is we’ve got a strong track record of growth and if you look at the last 10 years in excess of on average in excess of $300 million [indiscernible] CapEx growth and over the last five in excess of $400 million and when we look out the opportunity sit in front of us once of which you just mentioned which is a collection of projects which we collectively said, if they eventuate there’s a $1 billion of growth CapEx. But the better way to think about that is, we’ve got a strong pipeline of growth opportunities in front of us that give us the confidence that 300 to 400 and in that range is something which we can continue to expect out into the future. There’s certainly going to be different opinions on which projects you’re going to proceed. Whether it’s going to be import terminals or guest pipelines from guest projects or maybe combination of both. Ultimately it will be the customers that decide those, but the important thing is we’ve got ourselves into a very strong position having relationships and memorandums of understanding and agreements with all of those parties.

And just to finish out a process I think more than anything else, James. And our board is very detailed in a context to what they allow us to talk to the market about in terms of guidance. And we have to justify to them in detail where we think our guidance is in respect of everything that we give guidance on. And $300 million to $400 million of CapEx over the next two to three years is part of that. And so, we presented a paper to the board yesterday that gave them comfort that number is still an appropriate number because we talked to them the things that we’re seeing and the things that we’re talking to our customers about and the likelihoods of timing etc, etc. So, there’s a process behind what we do, these are not number that I’ve just picked out the year. There’s not only a process behind what we do, there’s authorization and due diligence by our board before we even talk to you about these sorts of numbers.

Okay, in that case let me give you the better for those out there and assuring that you can spend $1 billion over that two to three years’ time horizon. Your upgrading cash flows and new debts more than cover that level of CapEx while still being able to grow the distributions to shareholders are kind of growth rates that we’ve seen over the last few years.

I think so; I mean you look at our numbers today. We’re talking a $1 billion plus of operating cash flow and $1.07 billion or something in the full year. which is something I just told you that we hadn’t talked about [indiscernible] for free, you take that and you say $600 million of that is distributions and you’ve got $500 million left to invest in that growth CapEx and we haven’t borrowed another $1 to fund growth CapEx in the last year and we don’t intend to and don’t expect to. So, from our perspective, we’re nicely set. We’ve also got, you’ll see that the rating metrics admittedly out calculations both on our website this morning and the documentation here. But in excess of three times, if [indiscernible] interest, in excess of close to 11%, if we did these are strong metrics relative to what the expectation is for us in the BBB, Baa2 rating. So, we’ve got capacity there to fund that sort of growth if necessary, but my view is we fund growth and increase distribution from our parting [ph] cash flow which continues to grow.

Got it, great. That’s all from me. Thanks very much.

Thank you. Your next question comes from Mark [indiscernible] from JP Morgan. Please go ahead.

Just a quick question about potential growth opportunity, in the last week or so we’ve been hearing what side is planning on selling down Pluto Train 2 which sort of feels like it fits within the category of what you’re looking for in energy related asset with fixed price off take. Can you give us an idea of the level of interest in something like that? I mean have you already started doing due diligence on a project like that? And equally even if you just bought it in cost, I mean expansion is US$6 billion. I mean is the scale of the project something you’d potentially be interested in as well?

Mark thanks. It’s Rob and I’ll take that question. Clearly, we wouldn’t be able to comment on as to whether we’ll be participating in prices or not, regardless of whether that point or any others and that will be our standard response to any of those sort of questions. What I would just offer is that, we’re in energy infrastructure business and we’re always looking at those sorts of opportunities that where there’s energy infrastructure and we’ve got a good off take, but certainly can’t comment specifically about particular prices.

Okay, well can I say is hypothetically you’re to buy into project of that scale, what would have mean for your balance sheet or how would you pay for it?

Hypothetically if that’s, if were to buy a business in the US that was let’s call it $4 billion which is what we’ve talked about in the past is, the balance sheet today is not set for acquisition of that absent raising equity and so those sorts of acquisitions level like back in 2014 when we acquired the Wallumbilla Gladstone Pipeline, $6 billion, it took us. The balance sheet was very strong on the day we did it, but we raised $1.8 billion of equity and US$3.7 billion in debt so. Those sorts of things we’ve set this business today for and the balance today for operational capability there’s nothing that we’re doing operationally that I believe we need to go to the market for equity for. But again, we’ve always said in the context of a significant acquisition, we always support it with equity and appropriate amount of equity and funds retained in the business. So, where that number starts and finishes is will always depend on the day. But we said in the past, we said it back in February 2018 when we funded $1.5 billion of projects. We see - about $500 million worth of equity sounds about right for that. $1.5 billion was a lot more than we’ve been sort of used to, as we sit here today. We’ve generated a lot more cash flow and so we don’t think the operating - those sort of organic growth things need any further equity support, but any acquisition will.

Okay, that’s all from me. Thanks so much.

Thank you. Your next question comes from Bayden Mo [ph] from Goldman Sachs

Just a quick one from me. I was interested just with the delays at Orbost. What gives you the confidence now that you’re going to hit February or March? Is there anything specifically in that project that was holding you up into December that’s now dominant, you could reference? And then what are you including into your guidance into this year to contribute from Orbost?

Just quite simply the project as we’ve said has had delayed driven by the construction contractor. We took operational control of the plant late December and what’s giving us the confidence that March is when we’ll commence commercial operations is because we safely introduced gas into the plant yesterday and we’re - and that Sole gas we’ll forecasting that we’ll be introducing raw gas from the Sole gas plant this month in February and those two things together with all the other activities happening on site give us the confidence that we’ll be commencing commercial operations in March. In terms of the guidance, I’ll just refer to Peter for that question.

What I’ll add to Rob’s question before I answer that is that since we took operational control of the site in December. Our people have been providing us with a daily schedule of completion and daily target for completion and we get that on a daily basis and APA’s got some very disciplined methodologies for doing this sort of stuff and we’re now commissioning an asset and the confidence we get is from the people doing that commissioning and what they’re showing us on a daily basis, not only a weekly or not a monthly basis. We get it daily and we know what’s going on. In fact, I got a photograph this morning at 4 AM of the flare that was ignited late last night I think so, in respect of guidance mate we’re at 16.60 to 16.90 and that includes everything. We’re not going to give you numbers from this or there or anything else to be fair. We’ve been pretty good with our guidance over a number of years and we’re confident that we’ll be within that range albeit as I said earlier a little bit towards the bottom end of that range and I hopefully the market will understand that and will give some guidance next year about what will happen with the full year, with Ross involved. So, we’ll go from there.

Okay, thanks guys.

Thank you. Your next question comes from Nathan Lead from Morgans Financial. Please go ahead.

Just three quick questions from me. So firstly, Peter, you’re talking there before about funding capacity. Can you maybe just have a bit of a stab first about how much capacity you think you got on your balance sheet before you need to actually tap the market for equity? Just how much capacity to fund new projects?

That’s a very interesting comment. It’s probably not a given number, as you said here today. We sit down and always done this, when we look at acquiring things and we talked to the rating agencies through the process, it’s part of our due diligence process, we actually go through ratings of evaluation services and ratings assessment services with both the rating agencies as we lead up to finalizing transactions so that we exactly know what we can and can’t do with the balance sheet in respect of a particular asset. In the context of the way the rating agencies look at various different things, they do have different views on different assets and as do we. So, we may have a different view on a regulated LDC in the US to a wind farm that we might [indiscernible] buy or try to buy, want to buy in Australia. So, it’s differs to be fair. But what I’d say is that, we’ve got strong balance sheet it’s a balance sheet where people ask us why aren’t you considering capital management and buying back securities etc. while the answer is, it’d be dumb for us to think about buying back securities tomorrow to maybe deal with $500 million of headroom if that’s what it is, an then come to you in three months’ time and say, we want money to buy an asset in the US. Now it’s not saying we’re stockpiling, but it’s saying that we’ve got a balance sheet that is strong enough to withstand issues in markets. But it also gives us some ability to deal with things that are going forward that might acquire smaller assets.

Okay. Second question to you, Peter, also. Obviously, you’ve got tax losses there that are sort of meaning that your cash tax paid is probably a bit lower than what it otherwise normally would be if those losses weren’t there. Could you just sort of talk through maybe when you expect those losses to be fully utilized?

It’s a difficult one. The tax losses we have today are what’s called available fraction losses and so, we can’t even sort of tell you how much of those we’re going to use in any given year because of what you use is based on valuations and etc, etc. so but look from our perspective what we’ve done in the past is we’ve given guidance in respect of tax. It’s been a little bit more informal guidance. So, I think we gave you some informal guidance that today about what tax looks like this year. It’s very difficult to tell you what the tax looks like beyond that because again it comes down to what shelter you get from accelerated depreciation of new assets that you put on the balance sheet by way of either acquisition or that capital growth and that changes as well. So, we’ve not talked about the available fractions in terms of numbers and how long they last, but we’re using them and that’s getting, that’s flowing through as benefit to security holders.

Okay. And maybe one for you, Rob. We’ve talked a lot today, I suppose, about growth investment opportunities. But can you talk about maybe the latent value in your existing assets? I suppose, one of those places could be uncontracted capacity. But maybe if you could just chat a little bit about that?

Thanks, Nathan and it’s good that you saved a question for me as well. Look clearly, we’re obviously very confident and optimistic about the growth and to cover that off. The simple answer is that, from time-to-time there is available capacity on asset side. It really differs by asset by pipeline and also, we overtime use the system as a grid, we’ve been providing storage about the services about the way of example, the Goldfield Gas Pipeline is fully contracted and at capacity and anything more that needs to happen in that regard will require further capital and expansion. It really does differ and it’s very hard to be able to comment specifically around those opportunities. But the commercial team are fully charged with making sure they look to commercialize any available capacity and respond to our customers’ needs.

Thank you.

Thank you. Your next question comes from Peter Wilson from Credit Suisse. Please go ahead.

Peter, this to the extent you’re willing - can you give us a guide on second half D&A given that Orbost will be coming online in that timeframe?

Sorry, can you what?

Second half D&A, whether we should expect to step up given Orbost is coming online?

Haven’t thought about it to be fair my friend, so it is something we can take offline. Again no, don’t have a number off the top of my head.

Okay, that’s fine. And then given what’s happening with Spot LNG prices. It looks like it’s going to be gas which it’s going to try and find its’ way to domestic market. I’m wondering whether there is upside opportunity for you guys there. Either in an increase in variable revenue also in short term contracts.

Peter, I’ll take that one. And we were always looking at those opportunities in the market and if we’re not looking at them. Our customers are talking to us about those opportunities. We’re well set up with East Coast screwed in with our multi-asset multi-service contracts. Our integrated operations center is always looking that on a day-to-day basis. So due to the in effect on a day-to-day basis we’re seeing those opportunities come through. I think the short answer is, that’s our business and it’s to the extent there’s available gas and there’s a market for it, it will we’ll always look for ways to get that gas to that market.

Okay, it does seem to be you know everything kind of escalating, given what’s happening originally. Do the first half results benefit to an extent from that theme? So [indiscernible] for example that in the pie chart you gave the portion of variable revenue had increased obvious more than out, but it has increase versus full year amount.

I can’t answer that question with any specificity. Peter, I think that’s part of what we do every day is we respond to those sorts of opportunity, do you want to put a number on it is certainly difficult for us.

I think to keep in mind; Peter is that more gas coming from Wallumbilla because of lower LNG prices, that gas could be using capacity that we’ve already sold to a customer. From our perspective as we’ve said most of the last 10 years. All the capacity on these pipelines are sold in long-term contracts to our customers and so if one of our customers manages to acquire some gas that’s cheaper at Wallaumbilla, as it’s been the case over many years. They’re just using capacity that we’ve already sold them. So, the as available revenues that come to us are about using capacity that’s not used by a customer and of delivering the service that may allow us to use some capacity that’s not used. But generally the phenomenon you’re talking about, the benefits are going to flow to our customers, who are acquiring that gas from Wallumbilla cheaper than what they might to be able to get that gas say Longford and therefore they’re bringing it south on capacity they already owned, if you like they’re already paying us for.

The only I’d just add to that Peter is, I think if you look in the financial report for the half. There’s a breakout box that gives us some examples of some of the things that we’ve been doing just by way of example and responding to those sort of opportunities. So, if you find that page, I don’t have directly in front of me. But I think you’ll get a good sense for how our business is working closely with our customers in that regard.

Okay, that’s good. I’ll leave at that. Thank you.

Thank you. There are no further questions at this time. I’ll now hand back to Mr. Wheals for closing remarks.

Thank you. And thank you to everyone for joining the call this morning. I’m sure I’ll catch up with many of you in person over the coming weeks. And just one last note from me is that regarding the date for APA’s Investor Day which I did postpone last year due to operating model review and that was underway, that Investor Day will now be held on Friday, the 8th of May and you can contact our Investor Relations team for further detail. Thank you again for your interest in APA.