The APA Group Ltd (ASX: APA) share price is in focus after announcing a new $1.3 billion majority stake in the Brigalow Peaking Power Plant, set to deliver 400MW of dispatchable energy in Queensland. A 25-year, inflation-linked agreement with CS Energy underpins project returns.
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What did APA Group report?
- APA to acquire 80% majority stake in the Brigalow Peaking Power Plant for approximately $1,015 million.
- Total project cost estimated at $1,269 million, with existing balance sheet capacity to fund APA's share.
- Returns supported by a 25-year inflation-linked hedge offtake agreement with CS Energy.
- The 400MW gas power plant will support electricity for over 150,000 homes.
- Part of APA's broader $3.5 billion organic growth pipeline.
What else do investors need to know?
The Brigalow Peaking Power Plant will be located next to CS Energy's Kogan Creek Power Station, boosting Queensland's fast-start energy generation. APA will lead delivery under a construction management agreement, while CS Energy will retain a 20% interest and operate the facility once complete.
APA is also building a new gas lateral and storage pipeline, linking the plant with its Roma to Brisbane Pipeline under a separate agreement. Early works are now finished, with GE Vernova supplying turbines and Monadelphous starting main construction. Project completion is targeted for early 2029.
What did APA Group management say?
CEO and Managing Director Adam Watson said:
We are pleased to confirm this partnership with CS Energy to support Queensland's energy security and transition.
The Brigalow project aligns with the goals of the Queensland Government's Energy Roadmap, supporting energy reliability and affordability and demonstrating the important role the private sector can play to bring critical energy infrastructure projects to life.
The project also demonstrates momentum with our contracted power generation growth strategy as we continue to progress further opportunities to support Australia's energy transition on both the east and west coasts.
What's next for APA Group?
APA expects the Brigalow project to deliver returns in line with its hurdle rates and to play a vital role in supporting the energy transition. Management says the project forms part of its strategy to expand contracted power generation and strengthen national energy reliability.
Completion is slated for early 2029, with all major construction partners now engaged and works progressing. Investors can watch for further updates as APA advances its $3.5 billion growth pipeline.
APA Group share price snapshot
Over the past 12 months, APA Group shares have risen 19%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 1% over the same period.
