ITK r interviewed Mick McCormack CEO of APA. Mick has been CEO of APA for 11 years and has over 30 years experience in the energy infrastructure sector. APA has grown from basically a small gas pipeline company spun out from AGL to Australia’s third largest listed utility as measured by market capitalisation ($9 bn).
APA’s assets consist largely of gas transmission pipelines in Eastern Australia that connect up the Qld, NSW, Victorian and South Australian markets as well as gas transmission in West Australia, a wind farm in West Australia and some generation in Qld. Through its equity infrastructure partnerships, APA also has an interest in electricity transmission (Murraylink) and gas distribution in Qld.
Over the past 10 years APA has invested around $2 bn in growth capital expenditure and made around $10 bn of acquisitions. Over the past five years APA share price rose from $4 to $10 before recently falling back to $8.
In this 17 minute podcast Mick covers the company’s emphasis on a low cost of capital, and its interest in growing its renewable portfolio investment, particularly when backed by longer term Government PPAs. Mick also discussed the physical market for gas, notes that at current oil and LNG prices some “LNG gas” is finding its way back into the domestic market and expects the next set of gas resources to be developed in the Gaillee basin.
Mick also discusses APA’s view of recent regulatory reviews by the ACCC and notes the company expects to continue to grow its dividend into the medium term, with over $1.8 bn of growth capex in prospect.
This is a rare opportunity to catch up with the chief executive of one of Australia’s largest utilities and is part of our commitment to bringing front of mind issues of the thought leaders of the utility industry to the fore.
David Leitch is a regular contributor to Renew Economy. He is principal at ITK, specialising in analysis of electricity, gas and decarbonisation drawn from 33 years experience in stockbroking research & analysis for UBS, JPMorgan and predecessor firms.