APA Group (APA) Earnings Call Transcript & Summary

Well, good morning, everyone. My name is Michael Fraser, and I'm the Chairman of Australian Pipeline Limited, the responsible entity for APA Group that comprises of Australian Pipeline Trust and APT Investment Trust. On behalf of the Board, I'd like to welcome you all to this annual meeting of each of those trusts. As I'm sure you're all aware, the meeting is being held virtually today due to the COVID-19 pandemic. We have securityholders, directors and executive management in a wide variety of locations. So let's hope the technology holds up for all of you, and you find the meeting both informative and engaging. Before we move to the formal aspects of the meeting, I'd like to assure securityholders that every effort has been made to provide you with the opportunity to fully participate in today's meeting by asking questions and voting on items of business. On a procedural note, I now declare voting for all items of business open on the webcast and via telephone. The method used to cast your votes today will depend on the technology you are using to participate in this meeting. Please be assured that both forms of technology offer ample opportunity to vote. Voting will remain open for the duration of the meeting and for an additional 5-minute window to facilitate voting by phone. You can vote online by clicking on the Get a Voting Card box at the bottom of the webcast. If you are participating by telephone, at the conclusion of the meeting, the moderator will read out each resolution and provide instructions on how to vote during the allocated window. Please follow their instructions. [Operator Instructions] Please note that all questions lodged online and via the telephone will be limited to 512 characters each. Questions can be submitted at any time, and you don't need to wait for the relevant item of business to ask your question. In fact, we encourage you to start now. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. In addition, if we receive multiple questions on one topic, your questions may be amalgamated. We will endeavor to answer as many of your questions as possible today, while trying to ensure that we keep the meetings duration to a reasonable period of time. Joining me today in Sydney is Amanda Cheney, APA's General Counsel and Company Secretary. And she will read out the questions from securityholders. [Operator Instructions] If you need assistance, please refer to the detailed instructions in the Annual Meeting Guide that is available on the webcast platform and on APA's website. If you experience any difficulties, please call the meeting help line number, which appears in blue at the top of your screen. The meeting help line number is 1 (800) 992 312. Securityholders were also able to submit their questions in the lead up to this meeting. We'll also incorporate those questions and answers into today's meeting as appropriate. A copy of the webcast of today's meeting will be posted on APA's website as soon as possible. So with those housekeeping matters now out of the way and the fact that it is past 10 a.m. and a quorum is present, I declare open the 2020 Meeting of APA Securityholders. As I'm speaking to you today from Sydney, I take this opportunity to acknowledge the Gadigal people of the Eora nation as the traditional custodians of the land where this meeting is taking place. I pay respect to the elders, past, present and emerging of the Gadigal people and extend that respect to other First Nation people who are present. Let me start by making some introductions. Joining me in Sydney today is our Managing Director and CEO, Rob Wheals; Steve Crane, who is a non-Executive Director; and Company Secretary and Group Executive of Governance and External Affairs, Nevenka Codevelle. Joining us online are the following Board members: Debbie Goodin, who is Chair of the Audit and Risk Management Committee; Shirley In’t Veld, who is Chair of the Health, Safety and Environment Committee; Peter Wasow, who is Chair of the People and Remuneration Committee; James Fazzino; and Rhoda Phillippo. Rhoda is our newest director, having joined the Board in June this year, and you'll have the opportunity to hear from Rhoda later when she's considered for election. Let me also introduce you to the rest of APA's executive leadership team. Joining me in person today are Kevin Lester, Group Executive, Infrastructure Development; Elise Manns, Group Executive, People, Safety and Culture; and Hannah McCaughey, Group Executive, Transformation and Technology. And joining us online are Peter Fredricson, Chief Financial Officer; Ross Gersbach, President, North American Development; Julian Peck, Group Executive Strategy and Commercial; and Darren Rogers, Group Executive, Operations. We're also joined in person today by Jamie Gatt, who is APA's audit partner at Deloitte Touche Tohmatsu. The notice of meeting dated 21st of September 2020, setting out the business for today's meeting has been sent to all securityholders. For reasons that I'll touch on shortly, an addendum to that original note of meeting were sent to all securityholders on the 2nd of October 2020. The items of business for consideration today are described in the Notice of Meeting and addendum, which I will take as read. The slide up on the screen sets out the agenda for today's meeting. Before we move to the business of the meeting, Rob Wheals and I will report on APA's performance for the 2020 financial year and our strategy and outlook for the current year. We'll then move to the items of business set out in the notes of meeting. We've also set aside time at the conclusion of the formal business to answer any other general questions you may have. Copies of my address and the Managing Director's address have been released to the ASX, and they'll be posted on APA's website. So now turning to my formal address. This has been an extraordinary year around the world, and it also happens to mark the 20th anniversary of APA's listing on the ASX. Happily, financial year 2020 also marked 2 decades of growth for APA securityholders and that's a track record that we're all proud of here at APA. That record of growth, however, wouldn't have been possible without the hard work and commitment of our people. And in this most challenging of years as we've confronted, first of all, bushfires and extreme weather and now a global pandemic, I want to begin my formal remarks this morning by acknowledging Rob Wheals for his exceptional leadership as well as the 1,900 people around Australia who make up the APA family. They've worked tirelessly to ensure we deliver safe, reliable and affordable energy to our customers and our communities. And on behalf of the Board, I want to publicly extend my thanks to the entire team for their hard work and resilience in the face of extraordinary challenge. True to our commitment to customers -- to our customers and the community, APA has put in place a range of initiatives to support customers and suppliers in vulnerable circumstances. This includes fee and service flexibility and other support measures to help with affordability and financial viability. As we adapt to the new COVID normal environment, the health, safety and well-being of our people, our customers and our communities will remain our top priority. At the same time, as the focus shifts to economic recovery, as a proudly Australian business that invests in energy infrastructure, APA stands ready to play its own very important part. Turning to our financial performance in financial year 2020. Despite the obvious external challenges, APA again recorded a solid set of results. Pleasingly, our strong balance sheet and stable revenue streams help safeguard APA's earnings against market volatility. Our revenue was up 4.8% on the previous year to just over $2.1 billion, while our EBITDA of $1.65 billion increased 5.1% year-on-year. In financial year '20, the Board was pleased to declare full year distributions of $0.50 per security, an increase of 6.4% on financial year 2019. For our long-term investors, total securityholder returns since APA's listing 20 years ago in June are now 2,203%. The long-term sustainability of the business is at the core of every decision we take at APA. Energy infrastructure inherently requires a long-term perspective. We invest today to deliver benefits to customers, shareholders, the economy and society well into the future. The investments we've made in renewable energy over the last 11 years are a great example of APA's forward-looking approach. We are now Australia's 6th largest owner of renewable power generation assets, with just over half of our power generation coming from wind and solar. Energy transition is a significant area of focus for the Board and management. While natural gas will undoubtedly remain a critical part of our country's energy mix well into the future, we also see significant opportunities in new energy sources and technologies as well as ongoing opportunities to continue growing our renewable portfolio. I want to highlight just one example of the kinds of innovation we're involved in. In financial year '20, the Australian Renewable Energy Agency announced a $1.1 million of funding for a renewable methane project -- pilot project was at Wallumbilla being developed by APA with our partner, Southern Green Gas. That potentially carbon neutral project is investigating whether it's possible to create methane using solar power electricity, water and CO2 from the atmosphere on an industrial scale. This could then be transported through our pipelines. While this is an early stage project in the development of the technology, we look forward to reporting on its progress in the future. We understand the challenges and opportunities that climate change presents both for our business and for the long-term prosperity of the Australian economy and community. APA supports the global transition to a lower-carbon future, consistent with the Paris Agreement goals. You'd be aware that in April, we published our Climate Change Position Statement, and earlier this month, we were also pleased to deliver our first Climate Change Resilience Report. This report provides a comprehensive analysis of the resilience of APA's current asset portfolio under 3 divergent climate scenarios to 2050. Importantly, it confirms that APA's current portfolio of assets remains robust under each of the modeled scenarios, including a 1.5-degree Celsius pathway. But more than that, it also underscores our opportunities for diversifying our capital investments in the energy infrastructure of the future. As we continue to evolve our strategy, I want to assure securityholders that we'll continue to take a long-term view so that whatever Australia's future energy mix, APA will be at the forefront of developing world-class responsible energy solutions. Turning now to our outlook for the financial year 2021. Despite the ongoing challenges of COVID-19, your Board remains confident in the strong financial and operational position of APA. While we're not immune from the present economic downturn, we are resilient, and pleasingly, our trading performance during the first quarter is in line with our expectations. On that basis, we continue to forecast EBITDA to 30 June 2021 within the range of $1.62 billion to $1.66 billion. In conclusion, with the focus now turning to economic recovery and very much on an infrastructure-led recovery, APA is both well positioned and well placed to play a major part in this most urgent task of helping rebuild our economy from the impact of COVID-19. And with our refreshed purpose, vision and operational structure, which Rob will speak to shortly, and the strong foundations we've built over 20 years, I believe we're embarking on our third decade with confidence. Thank you for your ongoing support. It's now my pleasure to invite Rob Wheals to address the meeting.

Thank you, Michael, and good morning, everyone, and welcome to the Annual Meeting for 2020. I, too, would like to begin my remarks today by acknowledging the efforts of our people during this most extraordinary of years. This year, we've had to adapt to rapidly changing circumstances from bush fires to border closures and even movement curfews. These have had widespread impacts on our operations and have forced us to do our essential work in new ways and to rapidly adapt. Being an essential service provider, communities around Australia depend on us delivering. And our people have demonstrated enormous resilience as they've continued to operate our assets safely and efficiently and most importantly, without disruption to supplies. They have done so while prioritizing the health and safety of their colleagues and customers and the communities in which we work, and I'm extremely proud of their efforts. Safety must always be our #1 priority. And on that note, I am especially pleased to advise, we have had no fatalities or regulatory penalties related to work, health and safety in financial year '20. While some of the COVID-19 restrictions are now thankfully starting to ease, and we're adapting to a new COVID normal, I'm confident our teams will continue to deliver for our customers and the nation. As we have navigated through this period, it has underscored for me the importance of our purpose as a unifying force in good times and bad. A clear purpose reminds us what we are here for and why we do what we do. And we know that a purpose-led -- that purpose-led companies attract and retain talent and achieve much greater results. Earlier this year, we unveiled our refreshed purpose, which is to strengthen communities through responsible energy. This means taking a long-term view and creating value for all of our stakeholders, customers, investors, the environment, communities, authorities and our employees. It underpins our redefined vision, which is to be world-class in energy solutions. And this means being at the forefront of the responsible energy transformation, leveraging our existing portfolio and skills and investing in future technologies. And I'll speak more to that shortly. It also means having an unwavering customer focus, the highest possible standards of integrity, credibility, safety and environmental performance and a reputation for making a positive impact on communities. Our new streamlined operating model ensures we are set up to achieve that vision, with capacity for innovation, scalability and agility. It will enable us to deliver on our 6 strategic imperatives, and those are the things I believe we will need to excel in to deliver on our purpose and our world-class vision. Importantly, our customers are at the center of all of it because we know that APA is successful when our customers are strong. And our growth is inextricably linked to that of our customers. My executive leadership team has evolved to reflect this new operating model, and this includes the appointment of Hannah McCaughey to lead our Technology and Transformation division; Julian Peck as our Group Executive Strategy and Commercial; and Darren Rogers as Group Executive of Operations. I want to take this opportunity to acknowledge APA's long-standing Chief Financial Officer who will retire this December. I've had the privilege of working with Peter Fredricson for much more than a decade, and he has been an excellent CFO supporting the extraordinary growth of APA. And on behalf of all of our securityholders, I want to take this opportunity to acknowledge Peter Fredricson's outstanding contribution. Adam Watson will commence as Chief Financial Officer in mid-November. Adam joins us from Transurban, and we welcome his extensive experience across a range of financial disciplines and ASX-listed companies. Returning to the energy transformation that is now well underway. This presents both challenges and opportunities for APA, and we've been working on our own energy road map to a holistic approach to decarbonization. Natural gas, producing half the emissions of coal will continue to have a critical role to play in our energy mix in the decades ahead. It is fundamental to our economic prosperity, including through a manufacturing LED recovery. It will support the shift away from coal, and it will be a key enabler as we transition to a cleaner energy future. As the Chairman has already highlighted, our Climate Change Resilience Report underscores both the quality and strength of our existing asset portfolio as well as the diversification opportunities before us as we strive towards our ambition to be world-class in energy solutions. No matter which pathway the world follows in the task of decarbonizing our economies, APA will have no shortage of investment opportunities that we can take advantage of. We will continue to adapt and innovate just as we have done over the last 2 decades, and we'll continue to leverage our core pipeline capabilities and operating expertise into developing the energy infrastructure business of tomorrow. Of course, we'll also continue to play our critical role in addressing the urgent energy challenges of today. The government has specifically highlighted the criticality of the gas sector in supporting our recovery from the extraordinary economic impacts of COVID-19. As a proudly Australian business, APA is playing its role. And with a forecast 2023 winter gas supply shortfall in the southeast gas market, we are already working to ensure capacity on our East Coast Gas Grid is not a constraint. We've begun work to expand our East Coast Gas Grid. The expectation is that over time, we will invest up to $700 million to increase capacity by as much as 50% from our Wallumbilla Gas Hub in Queensland to the southern states. Importantly, these investments are able to be made incrementally and efficiently and importantly, without the need for any government subsidy to develop capacity as and where it is required by the market. Elsewhere in Western Australia, the organic growth of our pipeline and power generation infrastructure continues to gain momentum. The more we develop interconnected infrastructure like the Goldfields and Eastern Goldfields pipelines, the more interest we get from customers. And we're responding to customer needs by providing energy solutions that include both gas and renewable energy. We're also considering frontier basin opportunities, including the Beetaloo, the Galilee, the Bowen and the Nicholson basins and we're working with customers and government on a range of options. As I've said before, we see over $4 billion of domestic growth opportunities over the next 5 to 10 years. And of these as much as $1 billion of projects are in active discussion with customers for decisions and/or delivery over the next 2 to 3 years. We understand how important it is that we play our part in Team Australia at this critical time. Our customers are under pressure, and we're working with them to meet their needs and help protect jobs. For example, earlier this month, we executed revised arrangements for the transportation of ethane feedstock to Qenos' Botany plant over the next 5 years. Recognizing the significant cost pressures manufacturers currently face, our new agreement ensures both the safe and reliable delivery of ethane while helping protect Australian jobs and importantly, support economic activity right around the country. Finally, APA continues to explore potential offshore growth opportunities in our core sector of gas distribution and transmission, focusing on North America. Ross Gersbach has been based in Houston since September of last year, leading our efforts to identify potential opportunities to enter this market and to take advantage of the abundance of low-priced natural gas and the continued growth in demand in that market. As I've said before, we'll only proceed if an investment meets our very strict criteria. To conclude, with our refreshed purpose and vision, the right operating structure and team to take us forward, our commitment to putting our customers at the center of everything we do and a focus on our company culture and capability, I believe APA is well placed to execute and deliver on our strategy of continued growth in this evolving energy market. We are well positioned to deliver the responsible energy solutions of today and to respond to the opportunities of tomorrow. And with that, I'll hand back to you, Michael, to move on to the formal business of the meeting.

Thanks very much, Rob. And look, just before we go on, I also wanted to acknowledge on behalf of the Board and all securityholders, Peter Fredricson, our CFO, who, as Rob indicated, is retiring in the not-too-distant future. Peter has been CFO through a remarkably successful period for APA. And Peter, you should be rightfully proud of the contribution that you've made. And on behalf of the Board and all securityholders, we say thank you and wish you all the very best for the future. I'd now like to turn to the formal business of the meeting. There are 6 items of ordinary business today and 2 items of special business. On the items of business, where undirected proxies have been given in favor of the Chairman, it's my intention to vote in favor of all Board-endorsed resolutions and against the resolution that the Board has recommended that securityholders vote against. An opportunity will be given to securityholders to ask questions specific to each resolution to be put to the meeting before voting on the resolution. As I said earlier, I'd encourage those who wish to ask a question via the webcast platform or the telephone to please do so now so they can be queued into the system to be asked at the appropriate time. I ask you to nominate clearly which resolution your question relates to if it relates to a specific resolution so that it can be addressed. Alternatively, if the question relates to general business, please indicate this. [Operator Instructions] As we've asked you to participate virtually, all resolutions will be put to a poll. The first item of business today is adoption of the remuneration report for the year ended 30 June 2020. The remuneration report is included in the Directors' report section of the annual report and detailed remuneration received by directors and APA's key management personnel for the year ended 30 June 2020. As you're aware, the APA Board has adopted a corporate governance framework which is designed to be as consistent as far as practicable with the best practice procedures of publicly-listed companies. Under that framework, securityholders have the opportunity to vote on the adoption of the remuneration report. Resolution 1 is an ordinary resolution and will be passed if more than 50% of the votes cast by securityholders entitled to vote are in favor of the resolution. While the vote is advisory and doesn't bind the directors or APA, in accordance with our Corporate Governance Framework, if at least 25% of the votes cast are against the adoption of the remuneration report at the Annual Meeting in 2 consecutive years, then the 2 strikes mechanism will be triggered as per the Corporations Act. Amanda, do we have any questions or comments on this item of business?

Thank you, Chairman. Our first question is from a number of securityholders. Why is it that we have a bonus system for top management? We already pay them to do a job. If they cannot do a job without a bonus, why do we employ them?

Okay. Well, the -- I mean, the fact of the matter is that it's a highly competitive market out there for talented executives. And so we need to ensure that we're market competitive in the remuneration arrangements that we have in place. So that's the first point. Second point I'd say is that we try with our remuneration arrangements to align the interest of shareholders and management. So that if things don't turn out as well for shareholders, then things don't turn out as well for management. And particularly when we think about the short-term incentive for on-target performance, we almost see that as remuneration, which is at-risk for employees if targets aren't met because typically if targets aren't met, the outcomes aren't quite as good for shareholders. And so we don't think outcome should be quite as good for employees. Now the fact of the matter is you could say we'll do away with bonuses. But if we were to do that, in order to remain competitive in the market, we would have to substantially increase employees' fixed remuneration and you then miss out on that alignment between shareholder outcomes and employee remuneration outcomes. So we don't think doing that is in the best interest of securityholders. Amanda, do we have another question? Any other questions?

Thank you, Chairman. Our next question is from Ms. [ Elizabeth Padgett ]. In the long-term incentive plan, why is it that the payment under the plan is not held back for, say, 3 years to ensure that the actions to win the payment have not affected the performance of the company? After 3 years, if the company is still performing, then they can receive that payment. If not, then no payment is made. Is that not a better system to ensure that they make the correct choice for the long term, not the short term? I would like to understand your thoughts on this.

Well, in fact, that's exactly the kind of design that we've got under our new long-term incentive plan. And in fact, we are voting on performance rights for Rob under that at Resolution 5 today. Under the new scheme, what happens is that the performance rights are allocated now but they're held for 3 years. They're tested at the end of 3 years. So nothing happens with respect to them until they're tested against the performance hurdles that are set in 3 years' time. Then what happens is that whatever that amount is, and it may be anything from 0 is allocated if none of the hurdles are met up to 100% of the allocated amount being determined at that point in time. So whatever that amount is, 1/3 of those are then released to the employee at the end of year 3, other 2/3 of the allotment are held back, another 1/3 vest at the end of year 4 and the final 1/3 vest at the end of year 5. So in fact, we've gone further than the 3-year period. And the whole purpose of doing that is to ensure that employees are always thinking about the long-term value of the company. And just, I guess, another point on that is that also with respect to the remuneration arrangements, one of the things that we've done over the last year or so is to reduce the amount that is available to employees under the short-term incentive arrangements and put more emphasis into those long-term incentive arrangements with the 5-year vesting period, as I've outlined. Amanda, do we have any other questions on this resolution?

I confirm there are no further questions on this item at this time.

Okay. I'll just wait to make sure there are no other questions coming in. All right.

The details of the total valid proxies for this agenda item are displayed on the screen. I'd like to remind securityholders that voting is open. You can use the webcast platform to cast your vote. Alternatively, telephone participants will have the opportunity to cast their vote during the 5-minute window at the end of the meeting.

The next 4 items of business up on the screen relate to nominations for the 3 positions on the Board of the responsible entity, Australian Pipeline Limited that become available on the retirement of Peter Wasow, Shirley In’t Veld and Rhoda Phillippo. For convenience, I'll refer to the responsible entity, Australian Pipeline Limited as the company. Let me briefly explain the process that leads to the nominations. Under the company's constitution, at each Annual General Meeting of the company, 1/3 of the directors and those who've held office for 3 years since election must retire from office. Also, any director appointed during the year hold office only until the conclusion of the meeting. They are, however, eligible to reelection. On this basis, 2 directors are required to retire by rotation as directors this year, namely Peter Wasow and Shirley In’t Veld. However, both are eligible for reelection. Further, Rhoda Phillippo was appointed on the 1st of June 2020 and is seeking election at this meeting. Pursuant to its constitution, the company made self-nominate a person to fill the office of a retiring director, and the company has nominated each Peter, Shirley and Rhoda to fill the vacancies arising on their retirements. Also required by its constituent documents, the company invited securityholders to nominate candidates to fill the vacancies on the Board, which arise on the retirements I've referred to. It did so by lodging a notice with ASX inviting such nominations. One nomination was received prior to the release of the company's Notice of Meeting on 21st of September 2020, but subsequently withdrawn. An additional nomination was validly received by APA's external registry service provider in relation to Victoria Walker. However, due to an administrative error, this was unfortunately not passed on to APA before the release of the Notice of Meeting. An addendum to the Notice of Meeting was released to securityholders on the 2nd of October 2020 which included all the relevant information relating to the external nomination. The company's constituent documents require that APA securityholders approve the candidates for nomination as a director. Let's now consider their nominations one at a time. The second item of business is approval of the Board-endorsed nomination of Peter Wasow for reelection as a Director of Australian Pipeline Limited. Peter was appointed a Director in March 2018. He has been determined by the Board to be an independent director. The Notice of Meeting sets out some biographical material about Peter, which I'm sure you've all read. And we'll now hear a prerecorded address from Peter, who is in Adelaide today.

Thank you, Michael, and good morning. I'd like to start by saying that I'm honored by your consideration of me as a Director. But please note that I'm also aware that it carries with it an equally great duty of care, of diligence and of responsibility. I hope that I can continue to meet my duties to you by applying the lessons I've learned over a lifetime in the resources business and particularly in the gas business. Most recently, I served as Managing Director and Chief Executive of Alumina Limited, which, together with its joint venture partner, owned and operated the world's largest bauxite miner and alumina refining system. Here in Australia, the venture was the nation's largest gas consumer. In prior roles, I was intimately involved in the development of 3 LNG projects and other large-scale oil and gas projects in the United States, in Asia, in South America and of course, here in Australia, where we were, at that time, the country's largest domestic gas supplier. For much of this decade, I've also served as a Director of a number of companies where I've learned valuable lessons in how to best represent your interests and how to help create successful businesses from the perspective of the boardroom. In preparing for today, I was also reminded of the trust that you place in me and in my colleagues. In my various roles over the past 2 decades, I've interacted regularly with the largest institutional shareholders, both here and overseas. I believe I earned their trust through that time, and my hope is that I can earn your trust as I continue to serve on this Board on your behalf. And I conclude by saying that it would be my very great privilege to be able to apply these lessons and experiences for the benefit of all shareholders. Thank you for your consideration.

Thanks very much, Peter. Amanda, do we have any questions in related to Peter's nomination?

Chairman, I confirm that we have not received any questions on this item.

Okay. Thank you. The details of the total valid proxies for this agenda item are displayed on the screen. The third item of business is approval of the Board-endorsed nomination of Shirley In’t Veld for reelection as a Director of Australian Pipeline Limited. Shirley was appointed a Director in March 2018. She's been determined by the Board to be an independent director. And we'll now hear a prerecorded address from Shirley, who's in Perth today.

Good morning, ladies and gentlemen. I'm here today to seek your support to continue to serve as a Director of the APA Board. By way of background, I was born in New Zealand, grew up in Victoria, have law and commerce degrees from Melbourne University, but I've spent the past 30 years pursuing my corporate career based here in Perth. In that time, I have acquired senior executive experience across a number of different sectors, including mining, minerals processing, energy and manufacturing. I've also held 2 CEO roles, one in the private sector with Alcoa Rolled Products and one in the public sector with Verve Energy, which was the West Australian government-owned electricity generator. And I might add both of those were big gas users. As a result, I have acquired a sound understanding of business strategy, operations, risk management and regulation and a deep understanding of what drives a successful business. I'm currently also a non-Executive Director with Northern Star Resources, the NBN and Alumina Limited. And I have previously held non-Executive director roles with Asciano, the DUET Group, Perth Airport and the CSIRO. I can assure securityholders that I do have the capacity to continue to serve as an APA Board member to the standard that you would expect. And of course being based in Perth, I do bring some geographical diversity to the Board. I enjoy my work with the APA Board and very much value my colleagues and the approach that they and the management team take to ensuring that we do, at all times, act in the best interests of securityholders. I would like to continue to serve on the Board and to that end, seek your support. Thank you.

Great. Thanks very much, Shirley. Amanda, have we got any questions in relation to this resolution?

Chairman, I confirm we have no questions on this item.

Okay. So the details of the valid proxies for this agenda item are displayed on the screen. The fourth item of business is approval of the Board-endorsed nomination of Rhoda Phillippo for election as a Director of Australian Pipeline Limited. Rhoda was appointed a Director in June 2020. She's been determined by the Board to be an independent director. We'll now hear a prerecorded address from Rhoda, who is on the Sunshine Coast today.

Good morning. I'm Rhoda Phillippo, and I joined your Board in June of this year and currently sit on the Remuneration and H&SE Committees. I'm pleased to offer myself for election at this Annual General Meeting today, and I really thank you for your consideration. I'd be honored to be elected to serve under our excellent Chairman, Michael Fraser, alongside my fellow directors and in support of Rob Wheals and the APA leadership team. I'm an Australian Kiwi, who has lived in Australia for the last 7 years. The last 35 years of my career have been in the energy, telecommunications, IT and infrastructure sectors, the last 20 of those in New Zealand and Australia. By way of background, I trained as a poles and holes engineer with British Telecom in the 1980s, and I have a Masters in telecommunications engineering from University College London. I worked in commercial, engineering, operations and customer service leadership roles culminating and running the South East of England for British Telecom looking after 5 million customers and about 4,000 engineers. I moved to New Zealand with British Telecom, where I negotiated the first ever telecommunications interconnect deal with Telecom New Zealand, put together the strategy for taking out the old CDMA mobile network and built the first pay TV and telephony network with Telstra Saturn. My Trans Tasman Energy executive experience includes managing the transition of the New Zealand Shell business into private ownership, Z Energy and then to IPO. And as Managing Director, leading the sale of Lumo Energy, which was then the 4th largest retailer in the energy market in the East Coast of Australia to Snowy Hydro. My global Board experience spans the last decade, and I'm currently a non-Executive director on the Pacific Hydro Board, a renewable energy generator and retailer. And also on the Datacom Board, an infotech Trans-Tasman business. I serve as an alternate director for the future fund for their investment in Perth Airport. I chair the Remuneration and Transformation Committees with Datacom and sit in the order and Risk and Remuneration Committees of all the other boards that I serve on. My prior Board career involves chairing a transport ticketing business and also sitting on the boards of listed Australasian major telco and a bank. I'm passionate about the energy and telecommunications sectors and have gained deep insights into the challenges and strategic choices in the local and international market throughout my executive and Board career. APA has a tremendous portfolio of people, capability and assets, and the business is really poised to take advantage of the exciting opportunities within the local and global market. Outside of work, I'm a proud mom and grandmom with family that live all over the world. I've completed 33 marathons and 3 Ironmen before COVID got in the way this year. And I play the piano and trombone but obviously not both at the same time. I can confirm that I have sufficient time to dedicate to the APA Board role, and I'm a graduate member of the Institute of Company Directors in both Australia and New Zealand. I really look forward to working with this great team and adding value and insights as we navigate the exciting strategic choices that are present in our industry over the coming decades. Thank you.

Great. Thanks very much, Rhoda. And I think everybody would agree that diversity is one of the things that you look for in the makeup of your Board and certainly in terms of geographic diversity. I think we've got it well covered. As you've just seen, Peter, based in Adelaide; Shirley in Perth and Rhoda on the Sunshine Coast, and we also have directors down in Melbourne, and of course, here in Sydney. And I might add that Rhoda has made a terrific contribution since she started in June. So Amanda, have we got any questions in relation to Rhoda's nomination?

Chairman, we have received the following question from Mr. [ Michael Peters ]. What climate change lessons do you bring to the Board, Rhoda?

So obviously, that question has been directed to Rhoda. So if you're there, I might cross over to you, and hopefully, the technology works, Rhoda? Over to you, Rhoda. You're live, Rhoda.

Thank you, Michael. Yes. Thank you, Michael. And I think that the climate change challenges that the industry faces are fascinating. The lessons that I bring to the Board are predominantly those I've learned in my time most recently on the Pacific Hydro Board, where I've been exposed to some significant calculations and thinking about both the wind and solar future. And prior to that in my involvement in an infrastructure company that invested in Trustpower, predominantly a hydro generator in New Zealand. So hopefully, those insights, knowledge about decision-making and investment-making can be contributed to the APA strategy as we look at the role of renewables and the climate change targets that are really important for us to embrace as we go forward.

All right. Thanks, Rhoda. Amanda, do we have any further questions?

Chairman, we have received the following question from Ms. [ Amy Mahan ]. Although APA has had risk assessments by Energetics Pty Ltd., what innovation or business-pivoting experience do you have, please, Rhoda?

Okay, Rhoda. It looks like that's another question for you, if you're still with us there?

I am. Thank you, Michael. Some considerable innovation and business-pivoting experience of my background. I think one of the most fundamental would have been the role that I played in transitioning what was a downstream business of Shell into local ownership in New Zealand, and that really entailed Shell leaving behind a few -- a couple of hundred people and some green screen technology screens and removing all their global support, business processes, call centers and expertise from the business. So that was a significant business transformation experience for me, which involves everything from putting in place strategy, supply agreements, standing up a call center in 6 weeks and replacing all the technology. I think it gave me good lessons for understanding the challenges that businesses can face at different inflection points on their journey. And hopefully, that will contribute quite strongly to the technological challenges and transformation challenges as APA looks to the future.

Great. Thanks, Rhoda. Amanda, any further questions?

Chairman, I confirm we have no other questions on this item.

Great. Thank you, and thank you, Rhoda. The details of the total valid proxies for this agenda item are displayed on the screen. We'll now jump to Resolution 8, which was included in the addendum to the company's Notice of Meeting released on the 2nd of October 2020. The 8th item of business is approval of the non-Board-endorsed external nomination of Victoria Walker for election as a Director of Australian Pipeline Limited. As just mentioned, to rectify an administrative error on the part of APA's registry services provider, the addendum set out an additional resolution in relation to Victoria's nomination and the biographical information provided by her. APA has not independently verified her biographical information. On behalf of APA Group, I sincerely apologize to Victoria and the securityholder who nominated her for our external service provider's oversight. We'll now hear a prerecorded address from Victoria, who is in Sydney today.

Good morning. My name is Victoria Walker, the candidate listed on item 8 on today's agenda. I'd like to give you the background to my nomination and outline the skills and experience that I could offer the Board. My nomination was in response to APA's notice on the ASX website on the 7th of August calling for nominations for the position as Director. I've been informed since by APA that the Board employed a consultant earlier this year to identify potential Board members and had already selected those candidates that would support for election. However, I decided not to withdraw my consent to act as Director but to follow the process outlined in APA's notice on the 7th of August and that APA's securityholders decide the outcome. I've held shares in APA for 20 years. I've watched its development, and I consider it a great company and a very sound investment, as I'm sure you all agree. I'm impressed by APA's investment in a diversified energy future in pipelines and electricity but also in wind and solar generation. APA looks to the future, and I anticipate it will be involved in the new gas pipelines and as well in large-scale emerging technologies such as concentrated solar thermal. My interest in the company dates back to 1995 when I was given the task of reporting to Parliament on 2 privatizations, the sale of CSL, the Commonwealth Serum Laboratories, and of the Moomba to Sydney gas pipeline. The checkered history of the pipeline sparked my interest in APA, and I bought my first shares in 2000 when the company was first listed. My decision to accept nomination followed a spot on a television segment on the 11th of August in which the Chairman of the Prime Minister's National COVID-19 Commission Advisory Board, Mr. Neville Power, told the Senate Committee that our gas pipelines are too small, but they need to be enlarged in order to reduce the cost of energy to Australian households and businesses. Mr. Power's concerns were reiterated by the Prime Minister on the 1st of October when he announced the 6 manufacturing national priorities to guide our economic recovery from COVID-19. The Prime Minister said, "As part of our gas-fired recovery plan, we have committed to resetting our East Coast gas markets, unlocking gas suppliers, establishing a new gas hub and improving our gas grid distribution systems. If you're not for gas, you're not for manufacturing in heavy industries and the jobs that they support. For many manufacturers, gas is half the problem that they confront and that is why reforming that sector is so foundational to the achievements we hope for in the manufacturing sector." Now my immediate reaction to these comments was that APA, the owner and operator of the largest interconnected gas transmission network across Australia should have a seat at the table in these discussions and in future negotiations, providing input to the decision-makers to the Parliamentary Committees who oversight and inquire into them and the public servants who will write new legislation and design an oversight regulations. In my view, as part of any gas-powered national recovery plan, they need to hear from and work with APA. APA has been a remarkable, modest and quiet achiever. But I believe the risks and opportunities that have emerged in the last few weeks indicate it needs to take the initiative to talk to government to develop relationships and establish its credentials with decision-makers in Canberra and the states. I believe that I could be useful to the Board in ensuring that it is a smooth and effective process. I began work in the private sector after a number of years in London and Sydney. I've worked as a consultant and as a senior public servant in the Commonwealth with the ANAO, ACCC, AUSTRAC and the Native Title Tribunal. And in New South Wales in the office of the -- the Office of the Minister of Education, New South Wales Treasury and New South Wales Health. Prior to these, I worked in 4 Australian Parliaments, managing public accounts committees in New South Wales and Victoria and seconded the Commonwealth JCPA to work on a major tax inquiry. In Queensland, I designed a committee system aimed at revitalizing its parliament after the Bjelke-Petersen era. I was responsible for numerous inquiries and reviews of performance in major departments in 3 states and in the Commonwealth and for the preparation of 30 reports on these matters that were tabled in their parliaments. I also initiated and wrote better practice guides distributed across all Commonwealth agencies on matters such as corporate governance, managing corporate sponsorship, workers' compensation and parliamentary workflow. In all my work in the public sector, I've prided myself on retaining my private sector perspective. I've served on a number of executive Boards, Ministerial Councils and the council of a large university in New South Wales. I've served on Capital Works and Appointment committees, Ethics and Audit committees. I understand the responsibilities, the protocols and the workload of Board members. APA's Australia-wide perspective, its deep and broad knowledge of Australian industrial manufacturing and industry can contribute to revitalizing Australia's economy. I welcome an opportunity to work on the APA Board to bring this potential to fruition. Thank you.

Thanks very much, Victoria. And look, as I said earlier and as I've said to you privately, we apologize profusely that your nomination wasn't picked up when it originally came in, and we're sorry for any trouble or difficulties that, that has caused you. The Board has carefully considered the information provided by Victoria, including her work history in the public service. However, it considers that Victoria doesn't have the executive or company or listed company Director experience required to support her candidature. Further detail regarding the Board's rationale is set out in the addendum, which I trust you've all read. It's the Board recommendation that securityholders vote against the nomination of Victoria Walker for election as a Director of the company. Amanda, do we have any questions in relation to Victoria's nomination?

Chairman, at this time, we have no questions on this item.

Okay. The details of the total valid proxies for this agenda item are displayed on the screen. We'll now address the remainder of the items of business in numerical order. The 5th item of business is approval for the grant of performance rights to the Chief Executive, Rob Wheals under the APA Group long-term incentive plan. In financial year 2020, APA implemented a new long-term incentive plan for members of the Executive Committee, including the Chief Executive Officer. The plan is equity-based with performance rights being granted to participants under the APA Group Equity Incentive Plan. APA Group is seeking securityholder approval for the grant of 215,094 performance rights to the CEO as part of his annual long-term incentive award for FY '21. Amanda, do we have any questions in relation to this item of business?

Chairman, I can confirm that we have no questions on this item.

Thank you. The details of the total valid proxies for this agenda item are displayed on the screen. I'll now move on to the special business of the meeting, which consists of 2 resolutions. Resolution 6 and 7 will be voted on as special resolutions and will be passed if more than 75% of the votes cast by securityholders entitled to vote on the resolutions are in favor. The resolution is proposed to amend the constitutions of Australian Pipeline Trust and APT Investment Trust, which I'll refer to as the Trust to provide additional flexibility for security holders regarding how they attend and participate in meetings and to also clarify certain existing aspects of the meeting provisions. The proposed amendments have been included in a markup of Australian Pipeline Trust constitution attached to the Notice of Meeting. If you're joining us on the online platform today, you can download a copy of the Notice of Meeting to view. At present, interim measures are in place to temporarily allow meetings held under the Corporations Act to be conducted using technology. The Board of Australian Pipeline Limited, as a responsible entity of the trust, believes that increased flexibility introduced by these measures is helpful to securityholders, and therefore, should be permanently reflected in the wording of the Trust's constitutions. In addition to providing flexibility for APA to hold meetings of the Trust in times of crisis such as a pandemic, the flexibility could also be used to facilitate new meeting formats in the future. For example, by enhancing APA's traditional practice of holding its annual meeting at a physical venue in Sydney by also providing for online participation by securityholders who can't travel and attend personally. Amanda, do we have any questions in relation to this item of business?

Chairman, I confirm that we have no questions on this item of business.

Okay. We'll keep going then. The details of the total valid proxies for this agenda item are displayed on the screen. Okay. A summary setting out the details of the total valid votes and proxies for all agenda items is now displayed on the screen for your reference. The poll results will be released to the market by an ASX announcement and will also be available from APA's website as soon as possible. A reminder to securityholders participating online to please vote now. Polls will automatically close 5 minutes after the conclusion of this meeting, after those on the telephone have had the opportunity to vote. [Voting]

So that completes the formal business of the meeting. Now let me turn to matters of general business. We've already covered a number of the questions, which we received in advance of the meeting from our securityholders in the earlier addresses. I'll now open the meeting to questions in relation to the APA business, including any questions which relate to the annual report for the 2020 financial year. That report is available to view on the webcast platform by clicking the Downloads button at the bottom of the screen. I mentioned earlier that our auditor is here today and is willing to take questions on the auditor's report or the conduct of the audit through me as Chairman of this meeting. I'll now take questions from participating securityholders. Over to you, Amanda.

Chairman, we have received the following question from Mr. [ Michael Peters ]. This question is for Shirley In’t Veld. What lessons have you learned from the climate change Australia is facing?

Shirley, if you're there online, the question was, what lessons have you learned from the climate change Australia is facing?

Probably the biggest lesson I've learned was in my time as Managing Director of Verve Energy. Verve Energy at the time, this is from 2007 to 2012, was the West Australian government-owned generator of electricity in this state. And it had a suite of power stations, including coal-fired power, gas-fired power, wind, solar and some small hydro. It became apparent to me in the course of the 5 years I was at Verve that coal-fired plant was not the way of the future, that there were more efficient ways of generating electricity. So the biggest lesson really was in transitioning to renewable and solar and realizing that this was not only feasible from a technical point of view but in the long -- or in the medium to long term, we're certainly also commercially and financially feasible.

Thanks very much, Shirley. Amanda, any questions?

Thank you. Our next question is again from Mr. Peters. This question is for Victoria Walker in relation to resolution 8. What climate change lessons would you bring to the Board?

Look, I don't -- we've already dealt with resolution 8, Amanda. And so that question would have been asked there. And I think as everybody has already seen by the votes that Victoria won't be elected to the Board. So I just don't think that's an appropriate question, if we could move on.

Chairman, our next question is from [ LM and VJ Anderson ]. We are hearing a great deal about the federal government's plan for a gas-driven economic recovery and the building of gas-fueled power plants. What are the implications of this for APA, one, if this plan goes ahead? And two, if it doesn't? What is APA's reaction to the opponents of gas who claim that it is a pollutant similar to coal? Does this pose a threat to APA's business?

There's a lot in that question, Amanda. So let me say -- start by saying, well, obviously, we're very supportive of the government's announcements around gas and their commitment or understanding of the importance of gas to Australia's economic recovery. We're very supportive of any market-led mechanisms to increase liquidity and transparency in the market. And on the liquidity question, I think it's obvious to anybody who follows the gas market that with the decline in the Bass Strait fields, it's very important that new sources of supply are brought to market. Prices in the gas market, which put a lot of pressure on the manufacturing sector, put a lot of pressure on household budgets. Gas prices increased significantly going back a few years because of the tightening of the supply/demand balance with the LNG projects being built up in Queensland. Now prices in the gas market have come off over recent times because of an easing of that supply/demand balance. But with the outlook for Victoria, et cetera, and the decline in the Bass Strait field, it's very important that if we want to keep gas prices low and affordable and support the manufacturing sector, support households, support jobs, support the transition to a lower-carbon future by allowing more renewables into the system, then it's important that we bring on new sources of supply to keep prices lower for longer. Now from APA's perspective, we -- given the place that we hold in the Australian gas market, and as Rob indicated in his speech, we stand ready, willing, and able to play our part. We've already commenced the expansion of the East Coast Grid to make sure that gas can get to where it's needed. We've scoped out plans to spend up to $700 million, expanding the East Coast Grid by up to 50% in a north south direction. And very importantly, as Rob said in his presentation, we can do that without any government subsidies. We can also do it very efficiently because we can spend the money incrementally as and when it's required by the market. So the very clear message is that the -- is that APA's East Coast Grid will not inhibit the flow of gas up and down the East Coast. In fact, we are ready, willing and able to expand it as it is needed by the market and have, in fact, commenced that expansion. In relation to the second part of the question, which is about gas and coal. Well, I guess, let me state the obvious to start with that gas isn't coal. The emissions from gas-fired generation are substantially lower than those from coal. And we see that gas has a very important role to play in the transition to a low-carbon future. And I mean to go to one extreme, if you were magically able to convert all the coal-fired power stations around the world to gas overnight, you'd have a massive reduction in global greenhouse gas emissions. Another example I would give is that if you took 1,000 megawatts of coal generation out of the system and added 1,000 megawatts of peaking gas plant or firming gas plant as the government has talked about. I mean first of all, just because of the gas versus coal issue, let alone the much lower capacity factor of the peaking plant, you've got anywhere up to an 80% to 90% reduction in emissions. But very importantly, that extra peaking gas generation can allow thousands of more megawatts of renewable generation to be brought into the market. So I kind of say if there's an ideological opposition to gas, well, let there be an ideological opposition. But if the intent of that opposition is actually to reduce emissions as rapidly as possible while maintaining reliability and affordability, then there is a clear role for gas to play. All of that having been said, I think as you've picked up probably from my presentation and Rob's address this morning, we very much see ourselves as an energy infrastructure company. And we established a new technology and transformation division this year, and part of that is us looking forward to where the energy infrastructure of the future is going to be. And we are certainly looking forward and looking at the world through that lens and looking forward to invest in that low-carbon future. Amanda, do we have any other questions?

Chairman, we have received the following question from [ Terence and Christine Stanton ]. My wife and I are very concerned about the environment and climate change, global warming. APA is engaged in transporting fossil fuels, which increased the dangers of killing our grandchildren and yours. The Board should consider diversifying into renewable energy and running down its pipelines. As fossil fuels become more and more unpopular, the pipes will be useless. What are you doing to avoid the catastrophes of a worthless company and grandchildren with no future?

Well, let me say, first of all, if it hasn't come through clearly yet, that we very much share your concern about climate change. We, as a Board, are very alert to both the challenges and the opportunities that, that represents for APA. As I said earlier, we support the transition to a low-carbon future in accordance with the Paris Agreement. And I think as I said in my previous answer, we see that gas has a pivotal role to play in that. With respect to moving away from gas, we are already Australia's sixth largest owner of renewable generation assets. And just over 50% of our power generation portfolio today is, in fact, renewable, combination of wind and solar. As I also talked about in my presentation, we're investing in new technologies. We've got the renewable methane pilot project, which we're in the process of constructing up at Wallumbilla. We talked about our Climate Change Resilience Report, which we issued just recently. We're in the process, as I talked about, of developing our climate change policy and our climate change management plan. And as I've talked about in my previous answer, we don't look at the world through the eyes of being a gas company. We look at the world through the eyes of being an energy infrastructure investor. And we have a strategic intent to diversify over time and be part of the energy supply system of the future, which will undoubtedly be lower carbon. Amanda? Next question please.

Chairman, we have received the following question from [ Kevin and Jo Ann Taylor ]. What action is being taken by APA to protect the rights of indigenous peoples in Australia and also to address climate change? Is APA intending to diversify away from gas at any stage?

Well, I think I probably, in my previous answers, dealt with the question around climate change and diversifying. So with respect to indigenous communities, I think that positive, respectful and constructive relationships are how we think about our relationship with all of the communities, including indigenous communities that we interact with. We want to make sure that we understand the concerns of communities in which we operate. We want to do everything we can to try and mitigate those concerns, if those concerns are valid. We also want to try and ensure that the local community share in the economic benefits of projects which we developed -- which we develop. In the last year, we've developed a heritage management improvement plan. We've established a community and sustainability function, which is responsible for our relationship with local communities, including indigenous communities. We have been long-term supporters of the Clontarf Foundation and the Fred Hollows charity, which obviously do a lot of work with indigenous communities. And we're very committed to ensuring that we always carry out the necessary heritage studies for any projects that we do. And we always inevitably do that in consultation with local indigenous communities. Amanda?

Chairman, we have received the following question from Mr. Ian Anderson from the Australian Shareholders' Association. Congratulations on a successful 20th year and on a well presented annual report. However, we detect some reservations in your outlook for the next year around customer decisions and the likely contribution of the Orbost Gas processing plant. Could you expand on these issues and comment on any threats and opportunities for APA around the recent announcements concerning the Narrabri Gas Project and the involvement of government in gas-fired generation projects?

Okay. Well, again, a lot of strands to that question. And thank you, Ian, and it's been good to engage with the ASA in the run-up to the Annual General Meeting, which we've done a couple of times. It's a very constructive relationship. I think the first comment I would make, Ian, is just to restate what I said in my address today, and that is that the results for the first quarter are in line with the guidance, and we confirm the EBITDA guidance that we put out earlier on. That EBITDA guidance for FY '21 in relation to Orbost, if I perhaps deal with it first, that conservatively assumed that the Orbost plant -- the practical completion for the Orbost plant didn't occur until the end of the financial year. Now we're working very hard with Cooper Energy, who -- it's their gas fields. We're working very hard with them to try and bring that forward. And if we're able to do that, that will obviously be beneficial in terms of our financial outlook this year. In relation to customer decisions on projects, we've got line of sight today and are in discussions with customers over around $1 billion worth of projects that could be committed to and bought to market over the next 2 to 3 years. What we are seeing and is part of, as you know, a bit of the hesitation is, we are seeing some hesitation from customers to commit with the uncertainty that's out there, but that is, in fact, built into that guidance that we've provided to the market of $1 billion over the next 2 to 3 years. And we're quietly confident that, that can be achieved. With respect to the Narrabri Gas Project, most people would be aware that the Independent Planning Commission recently granted approval for Santos to proceed with that project. From APA perspective, we have a pipeline development agreement in place with Santos to build the Western Slopes Pipeline, which would connect the Narrabri Gas Field into the Moomba to Sydney Pipeline. It's a 460-kilometer, $500 million pipeline. So whilst that agreement is in place, until Santos confirms that they wish to proceed with the Western Slopes Pipeline, we won't be progressing with the EIS, the Environmental Impact Statement, which is really the next step which is required to progress that pipeline. So at the moment, we're sitting and waiting for Santos to confirm whether they wish to proceed with the Western Slopes Pipeline. Amanda?

Chairman, we have received a number of questions in relation to the following. In essence, APA Group failed to properly survey the proposed Western Slopes Pipeline on its previous attempts. The area the pipeline is proposed on is rich with heritage sites, like scar trees, burial grounds and birthing sites. The Gomeroi people do not give consent to a gas pipeline tearing through hundreds of kilometers of country. Without free, prior and informed consent from indigenous peoples of the country intended for the pipeline, how can you give confidence to shareholders that you can proceed?

Look, as -- I guess, first comment to make, as I've said before, we await confirmation from Santos, first of all, before we proceed with the EIS. But assuming that Santos provided that confirmation, the EIS process, Environmental Impact Statement, which is required in New South Wales because any gas transmission pipeline is deemed an asset of state significant infrastructure. So that has to go through an EIS process. That EIS process involves us doing a very comprehensive analysis of all of the issues associated with the selected route, including aboriginal heritage sites and a whole range of other things. And for people's benefit, that EIS probably will run to over 5,000 pages and 10 volumes. So it's a very comprehensive document. That document is then put on public display for 60 days, and that could be extended depending if there are holidays, et cetera, in between. So that goes on public display for 60 days. Any interested parties are able to make submissions to -- on that EIS in that 60-day period. What then happens is that we're required to -- APA, if we were proceeding, would be required to respond to those submissions, and we'd be required to submit any changes to the EIS that we might propose as a result of those submissions. So it's -- in some ways, it's a similar kind of process to what Santos has just gone through with the Independent Planning Commission. After we respond to those, there is then a report, which is provided to the relevant Minister to either approve the project or not approve the project. And if you were to get to that stage, and you were to get your approval, and you may have a whole host of conditions attached to it -- and I note that the Santos approval has 134 conditions attached to it. If you get through that process, then you've got to go the Commonwealth and get your Commonwealth approval. So I think to concerned parties, the key message is that before that pipeline can proceed, we need, as I said, Santos to confirm that's the way they want to go. We need, secondly, to go through that comprehensive EIS process, and there will be plenty of opportunity for any issues or concerns that people have to be ventilated and addressed by experts during that process. Amanda?

Chairman, we have received the following 2-part question from Ms. [ Kate Mildner ]. How does the development of the Western Slopes Pipeline meet APA's stated aim of "Reducing greenhouse gas emissions as a responsible risk mitigation response to climate change" or APA's aim of "Investing in the development of renewable energy infrastructure." Do these present shareholders consider present APA management showing sufficient vision with its investment decisions as world financiers move away from investments that increase climate change impacts such as the Western Slopes Pipeline?

Well, look, I mean, there's 2 parts to that. The first part of the question was around reducing greenhouse -- I'm just reading the question here, reducing greenhouse gas emissions as a responsible risk mitigation response to climate change. Okay. As I said before, and I think it just kind of highlights it. And I'll -- I said it on a global basis before. But if you were able, in Australia, to turn off all the coal-fired power stations tomorrow and convert them to gas, you'd make a very significant reduction to Australia's greenhouse gas emissions. So gas has a vital role in the transition. And I'm sure that when we talk about a transition, everybody would agree, we want to do it as rapidly as possible, but we want to make sure that the lights stay on. We want to make sure that there is reliable supply of energy, and we want to make sure that it's affordable. And gas has a key role to play there. The second part of the question talked about investing in the development of renewable energy, and how does that help? Well, I think I've outlined that again when I talked about the 1,000 megawatts of peaking renewable generation. The problem we have at the moment with more renewables on the system, there are a number of problems in relation to the grid being able to support it, but also there's the reliability factor. And whilst we think the batteries is going to have an increasing role to play, there's also a very important role for peaking generation to play there. So gas-fired generation, gas-fired peaking generation, in particular, has a very important role to play in allowing thousands of more megawatts of renewables to be bought on more rapidly to the system than otherwise would be the case. Amanda, the next one?

Chairman, we have received the following question from Ms. [ Rowena McCray ]. As you know, approximately 98% of the proposed Western Slopes Pipeline route has refused or revoked access. What is your explanation to your shareholders regarding the future of the proposed pipeline? Are they aware of the staunch opposition that will make this an unviable proposal? And do you intend to force your way into unconsenting communities like Coonamble as a social and political opposition to your unpopular pipeline continues to grow?

Well, look, my first response is, we -- you must be looking at different numbers to us because it's -- there's certainly not 98% of the proposed pipeline route being -- access being refused or revoked. That's simply not the case. Look, we are well aware of the concerns in the community. And I might say in response to that, and you've talked there about Coonamble, just for the benefit of all securityholders within the Narrabri local government area. Securityholders should be aware that the Narrabri Council has, in fact, publicly come out in support of the project. Our other securityholders should also be aware of the fact that in the Narrabri local government area, just under 50% of the submissions that were received to the Independent Planning Commission process that Santos just went through are actually supportive of the project. So it is interesting that in Narrabri, where the Santos project is proposed, that you've got the council and basically half of the community publicly supporting the project. But look, we are well aware -- that said, we're very well aware of the concerns that have been expressed elsewhere. If, as I said, Santos confirmed that they wish to proceed with the Western Slopes Pipeline, and we get into that EIS process, then there will be a very extensive community consultation process that goes with that EIS process. And we look forward to engaging with the local communities. Amanda?

Chairman, we have received the following question from Ms. [ Amy Mahan ]. How are the APA Board managing the risk of the new Narrabri pipeline becoming a stranded asset due to gas escape through the water table and escaping to the atmosphere rather than being transported through the pipeline as has happened in Queensland coal seam projects?

Well, let me just say, APA is the country's largest gas transmission pipeline operator by -- literally by a country mile. In fact, we've got 15,000 kilometers of pipelines out there. So we are a very experienced operator when it comes to the construction and operation of gas pipelines. So I'd simply say, I think the whole basis and the premise of the question about leaks and pipelines and gas escaping isn't a valid one. But again, what I would say is if you have those concerns, and there ends up being an EIS process around the Western Slopes Pipeline, then please make your submission and have it considered by the experts. Amanda?

Chairman, we have received the following 2-part question from Ms. [ Pamela Hartgrink ]. Why does APA not disclose the emissions generated when gas transported via our pipelines is burned? Are our large investors demanding this disclosure as a critical indicator of the company's exposure to transitional climate change risk?

Well, the first thing I would say is we don't actually have access to that data from our customers. But secondly, that's what's referred to as scope 3 emissions and there's certainly no requirement upon us to report that or to get to that. We can obviously have a guess at it. Look, with our large investors, I would just say, we are very actively engaged with our large investors around ESG issues. I've just -- I know Rob and the management team meet with our large investors on a very regular basis. And over the last month or so, I've been to extensive series of meetings with our larger shareholders. So we're very actively engaged with them on those matters. Amanda?

Chairman, we have received the following question from Mr. [ Daniel Gocher ]. APA claims that its 2020 Climate Change Resilience Report, "Represents a step change in APA's climate change disclosure." The report doesn't include emissions targets, and it states that APA is developing a "climate change management plan." When can shareholders expect APA to set emissions targets aligned with the Paris Agreement?

Well, thanks for that question, Daniel. Look, as I've said and you've indicated in that question, we're in the process of developing our climate change management plan. We fully expect that, that will involve us setting targets without kind of indicating what those targets would be. But we clearly -- there's a clear expectation from the Board that management will come back with targets that we will debate and settle on. And I would expect in the course of the next financial year that we will be publishing those targets. Amanda?

Chairman, we have received the following question from Mr. [ Jack Bertilis ]. The 2020 Sustainability Report shows APA has invested $750 million in renewable energy generation since 2009. However, total gross CapEx over that period has been over $4 billion. So for every dollar spent on developing renewable energy, APA has spent for expanding the global industry. Correction, I believe that's $4 billion, expanding the global industry on gas. Does APA plan to continue allocating less than 20% of growth CapEx to renewables?

Look, as I said before, we don't view ourselves, particularly looking for -- we obviously acknowledge the fact that our legacy business is heavily weighted to gas. But we actually don't see ourselves in a strategic sense and looking forward as a gas company, we see ourselves as an energy infrastructure company. And what we also see is that the world is going to decarbonize. And that decarbonization, it's going -- obviously going to take quite a long period of time, and it's going to involve several trillions of dollars over many, many decades. So from APA's perspective, it really is a matter of finding opportunities that meet our investment criteria. And quite frankly, if 90% of the opportunities that we saw met our investment criteria and sat with our risk profile for low-risk, low-growth, consistent earnings, which our shareholders value of 90% of that was renewables, that's where we would invest. So we have an open mind, but we are very attuned to both the risks and the opportunities that the transition to a low-carbon future represent for APA. Amanda?

Chairman, we have received a number of questions from securityholders that, in essence, ask as follows: APA's recent scenario analysis found that a 1.5-degree scenario would see reduced revenue compared to that forecast under the company's base case. How much would that revenue decrease by? And what is our company doing to ensure CapEx is not wasted on projects that would be stranded due to the reduced gas demand projected in the 1.5-degree scenario?

Well, look, again, for the benefit of all shareholders, when we've done this climate change resilience analysis, we've stress tested a number of scenarios, including a 1.5-degree scenario. And that stress testing is around our existing asset portfolio and it says what are the impact if it is a 1.5-degree scenario. And as that question said, it would result in some reduced revenues, but there is no impairment to our asset base. As new assets and in part of the process of looking at new assets, we obviously look at what the supply/demand outlook is. We stress test those scenarios. But we also -- our typical model for investing is that the investments we make are underpinned by long-term contracts. So as much as we're looking at the supply demand outlook, I want to make sure it's a good project, and we'll still work under different scenarios. It's the creditworthiness of our counterparties is also a very important factor from our perspective. But as we do -- also, then I would say that as we do add new assets to the portfolio, when we do our resilience report for next year, those new assets will be stress tested under the 1.5-degree scenario. And that information will be shared as it was in this report with securityholders. Amanda?

Chairman, we have received the following question from Ms. [ Amy Mahan ]. Please advise of your awareness of any Australian renewable energy investment reference groups that connect investors with new developments in low emissions energy technologies. And are you continuing to use the services of Energetics Pty Ltd to risk assess and diversify APA's investments?

Well, if I just go to the last half of that question first about Energetics. Look, Energetics were engaged to do the work around our resilience report, which we recently published. We've made no decision as to whether we would use them in the future, and we certainly haven't used them to risk assess and diversify our investments. That's something that we've typically done internally. With respect to the awareness of any Australian renewable energy investment reference groups that connect investors with new technologies in low emissions, et cetera. Look, we don't -- I mean we know our way around this space. And I don't know if there's anything that you want to add to that, Rob, we don't...

Thanks, Michael. Look, as Michael said, we're well connected into the market, but we also have, as you'd imagine, a large number of prospective projects being brought to us. And it's on that basis that we connect into the opportunities that come before us. But there's a range of different groups and investor groups that -- in the space. ClimateWorks is one of those that we've more recently engaged with and that is a growing space. And we will continue to engage in that regard.

Thanks very much, Rob. Amanda, could we go to the next question?

Chairman, we have received the following question from Mr. [ Richard Sedan ]. How is APA placed to have its infrastructure and pipelines used for the movement of hydrogen? Is this a future opportunity for APA?

Look, hydrogen, along with the other new technologies is something that we very -- are very actively watching. Obviously, hydrogen has got a long way to go before it becomes commercial. We intend -- we've been looking at some potential investments in that space to understand exactly the intent of that question and what is actually doable with respect to our existing pipeline for the movement of hydrogen. The short answer is, it's kind of too early on at this stage but securityholders should be -- should take comfort in the factor. As we said before, we've established a new technology and transformation division under Hannah McCaughey. And one of the key roles of that is to understand where the technology is heading and what opportunities that represents for APA.

Michael, if I may add to that?

Yes, Rob.

The question related specifically to hydrogen. And as Michael said, there's a number of projects, and there's a lot of government support for research and development in that space in which we're participating. But the other area of great interest is the ability to transport synthetic methane, which is effectively what our pipelines are designed to carry methane if the renewable energy -- or the project that we have established with Southern Green Gas for the -- doing research in that space effectively takes water vapor from the air using solar energy splits that water and creates the hydrogen and then take carbon dioxide from the air to create a synthetic methane, which can safely be transported in our pipeline. So that's just another example of innovation in that space.

Amanda?

Chairman. Our next question is from [ Dallas Cox ]. Would you please comment on the current share price and the fact that a significant number of brokers indicate that the price is overvalued or recommending sell?

Well, I guess, in short, I'd say that we're obviously happy with where the share price is. The other thing I would say is obviously that we had a takeover offer a few years ago, which was at $11, which the prices kind of traded there and about. So that's where other parties kind of saw the value of the company. Look, as for the brokers out there and the advice, their business is a bit like real estate agencies. You've got to have some people saying buy and some people saying sell. So people will have different views in the market. I would just reiterate that APA's balance sheet is in a very strong position. We've got strong cash flows. We've confirmed our EBITDA guidance out there, and it's really up to the market to determine what's the appropriate value. Amanda?

Chairman, we have received the following question from Ms. [ Anne Prior ]. Would you please provide an update on the Orbost Gas plant? When do you expect this plant to reach full capacity?

Look, I've already answered part of that question or that question in early -- my earlier response to the Australian Shareholders' Association. So I might ask Rob who's involved in it on a day-to-day basis, if there's anything he wants to add.

Thank you, Chairman. Maybe I'll just quickly give an overview of where we're at, and then I can answer specifically that question. The construction process for the Orbost Gas plant did take longer than expected. And then we got into the commissioning process. What's a little bit different about the Orbost Gas Processing Plant is that the gas -- the gas source has sulfur composition and a key part of the gas processing at the front end of the gas plant as a sulfur recovery unit to remove that sulfur. And that's where some of the challenges have been because the absorber units in that front end of the plant have -- there's been some sulfur deposition or depositing of sulfur into those units. And that's impacted the performance of the plant, and we've had to shut it down from time to time to remove that sulfur. So the 2 focuses that we have on a going-forward basis relate to, one, managing the farming activity that is leading to the sulfur deposition and we have works underway at the end of November and into early December to achieve that outcome. And we're expecting a much better performance from the plant on an ongoing basis thereafter. But also jointly with Cooper Energy, our customer, we're doing what's called root cause analysis to understand what is the cause of that sulfur deposition. That work will be ongoing. As Michael did mention in his comments earlier that our conservative assumption is that practical completion, which is the full production capacity of the plant has achieved towards the end of the financial year. But obviously, we're working very hard collectively with Cooper Energy and also our technology provider to achieve better performance in an earlier targeted date.

Okay. Thanks very much, Rob. Amanda, do we have any further questions?

Chairman, I can confirm that we have no further questions today from either the online platform or participants on the telephone. Thank you.

Great. Thank you very much, and thanks, everyone, for those questions. Well, that completes the business of the meeting. And before I close the meeting, please note that voting will remain open until the conclusion of the 5-minute voting window for telephone participants. For those voting by phone, the moderator will shortly read out the first resolution. You'll be required to promptly vote on that resolution using your phone's keypad. To vote for, press star 22 on your phone's keypad; to vote against, press star 2-3 or 23; to abstain, press star 24. You'll have 10 seconds to cast your vote. The telephone poll for resolution 1 will then close. The moderator will then repeat this process for resolutions 2 through 8. All polls will then automatically close. Thank you for your attendance today. On behalf of the Board and the APA team, we're very sorry that we're unable to catch up with many of you informally over some light refreshments, as we've done in the past. We sincerely appreciate your investor interest in APA, and I thank you for your patience and support with today's virtual meeting process. I wish you all good health until we meet together again. I now declare this meeting closed.