APA Group shares rise on pipeline regulation decision
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More news: APA Group shares lifted in morning trade on the ASX after the Australian Energy Regulator confirmed its draft decision that the existing light regulation regime should remain in place at the company's South West Queensland Pipeline.
APA shares were up 1.5% to $7.28 by midday AEDT.
RBC Capital Markets analyst Gordon Ramsay said the news was "positive" as the decision has removed any earnings risk on one of APA's largest pipelines and profit drivers.
APA Group welcomes regulator price ruling on Queensland pipeline
The news: Energy infrastructure owner APA Group has welcomed a final decision by the Australian Energy Regulator (AER) not to subject the company's South West Queensland Pipeline (SWQP) to full price regulation.
The context: The AER's decision is now final and follows the end of a consultation process following the release of the draft decision on 9 October. The regulator also confirmed that the existing light regulation regime applicable to the pipeline will remain in place.
The AER’s preliminary ruling comes months after APA announced in May it would delay expansion on the SWQP due to regulatory uncertainty tied to the government’s investigation into the pipeline sector.
The pipeline expansion, which links Wallumbilla in southeast Queensland to Moomba in South Australia, is seen as critical to avoid impending gas shortfalls in Australia’s southern states in the next two years. It was due to start construction in the second half of 2024.
What they said: "This decision helps build confidence to continue making the necessary investment in our East Coast Gas Grid to help meet gas demand on the east coast and support energy security for our customers and energy consumers," said APA's CEO and managing director Adam Watson.
"Now that we have clarity in our regulatory framework for our East Coast Gas Grid, we will move at pace top bring to market opportunities to optimise high-capacity compressor infrastructure across the network, as well as add capacity either on existing pipeline infrastructure or through new pipeline construction and looping."
The source: ASX announcement
