APA Group (APA) Earnings Call Transcript & Summary

[Presentation] Well, good morning, everyone. I trust you enjoyed that video. My name is Michael Fraser, and I'm the Chairman of APA Group Limited, which is the responsible entity for APA Group that comprises APA Infrastructure Trust and APA Investment Trust. On behalf of the Board, I'd like to welcome you to this joint annual meeting of each of those trusts. And given that it's now past 10:30 a.m. and a quorum is clearly present, I declare the 2025 Annual Meeting of APA Securityholders open. I'd like to begin today by acknowledging the Gadigal people of the Eora Nation as the traditional custodians of the land where this meeting is taking place. We pay our respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander people. Today's annual meeting is being held both in person and online. And before we move to the formal aspects of the meeting, I'd like to outline how security holders can participate in today's meeting. You can ask questions directly from the floor via the webcast platform or by phone. You'll also be able to vote on items of business in person or online. And I now declare voting for all items of business open. All items will be determined by poll and voting will remain open for the duration of the meeting. Security holders watching online will be able to ask questions during the meeting via the webcast platform by clicking on the Ask a Question box on your screen. Questions can be submitted online at any time, and I'd encourage you to start submitting your questions now, and I'll try and address them at the relevant time. Joining me today in Sydney up the back there is Nicole Lyons, Give us a wave. Nicole, where are you? Up there? Thank you. Nicole is our General Manager for company reporting, brand and reputation, and she'll read out the questions from security holders who are joining online. We'll aim to answer as many of your questions as possible today while ensuring we keep the meeting to a reasonable length. And to that end, I'd ask security holders to please ask no more than 2 questions and to keep them as short as possible. It may be necessary for us to group similar questions or summarize longer questions. A number of written questions have been received in advance of the meeting, and we have aimed to address many of these in the speeches or when we come to the relevant item of business. [Operator Instructions]. If you need assistance, please refer to the detailed introductions in the virtual meeting online guide that is available on the webcast platform. Webcast of today's meeting will be recorded and posted on APA's website as soon as possible after the meeting. I'd now like to introduce my fellow directors, joining me in Sydney today. At the end here, we have David Lamont, who's Chair of the People and Remuneration Committee; Varya Davidson, Nino Ficca, Sam Lewis, over here on my left, and Sam is Chair of the Audit and Finance Committee. We then have James Fazzino, who is Chair of the Safety and Sustainability Committee; and Rhoda Harrington, who is Chair of the Risk Management Committee. Also on stage with me this morning is Adam Watson, familiar to many people, our CEO and Managing Director. And also, you've just -- those people in the room, Bronwyn, who has just done the introduction, Bronwyn Weir, our Company Secretary. And sitting in our front row as the people who really know all about the business and can really answer all of your questions. So go and talk to them afterwards if you have any more by the time we get to the end of the meeting, with the AGL Executive Leadership Team. And we're also joined this morning by Harriet Fortescue, Harriet, where are you, where you are down in the front row and Harriet was APA's Audit Partner at Deloitte for this last financial year. On the screen is the agenda for today's meeting. The notice of meeting has been made available to all security holders. And so I will take it as read. Adam and I will report on APA's performance for the 2025 financial year as well as our strategy and outlook for the current year. We'll then move to the items of business set out in the Notice of Meeting. We've also set aside time at the conclusion of the formal business to answer any general questions that people may have. Turning now to my formal address. And as you've just seen in the video we played before the meeting, this year marked a milestone year for APA as we celebrated 25 years as an ASX-listed company. Across our sites and offices, our people today have celebrated how far we've come from our humble beginnings in 2000, listing with, as you would have just heard, only 6 employees and 3 pipeline assets. Now our rich history links back to AGL, who in 1837, was established as the Australian Gaslight Company to light the streets of Sydney with gas. But we have, over the last 25 years, grown as an independently listed business to own and operate a diverse portfolio of $27 billion worth of energy assets, and we transport about half the nation's natural gas. We've also delivered more than 2 decades of uninterrupted distribution growth for our security holders, which we understand makes us one of only 2 companies currently listed on the ASX to do so. Our proud history of delivery for customers, investors and communities continued into FY '25 with a strong financial and operational performance. Our revenue and earnings growth was towards the upper end of our guidance range, reflecting robust asset performance and a sustained focus on cost and capital discipline. Highlights in the year in the execution of our strategy over the last 12 months included completing construction of the Port Hedland Solar and Battery Project and the Kurri Kurri Lateral Pipeline, progressing our East Coast Gas Grid expansion plans and early works in the Beetaloo, as well as acquiring the Atlas to Reedy Creek pipeline. All of these projects will create value for securityholders. Over the past 12 months, we've also seen strong recognition and acceptance of the essential role that natural gas plays in enabling Australia's energy transition. And this really reinforces the critical role our assets will play to support Australia's energy systems over the long term. We're confident that our East Coast Gas Grid Expansion Plans, early works in the Beetaloo Basin, opportunities in gas power generation and ongoing growth in remote power generation in the Pilbara will create value for shareholders for decades to come. Over the past year, we've also renewed our Board following the retirement of Peter Wasow and Debbie Goodin. And once again, on behalf of the Board, I'd like to thank both Peter and Debbie for their service. Sam Lewis and David Lamont were both elected to the Board at last year's Annual Meeting with Sam, as I introduced her, taking on the role as Chair of the Audit and Finance Committee, and David, again, as I introduced him, is taking on the role as Chair of the People and Remuneration Committee. During the year, Varya Davidson was also appointed as a Nonexecutive Director, and she will stand for election today. James Fazzino and Rhoda Harrington also offer themselves for reelection at today's meeting, and we'll be hearing from both of them as well as Varya a little later on in the meeting. Climate has been a significant part of our sustainability agenda, and APA is committed to actively supporting Australia's energy transition consistent with the objectives of the Paris Agreement. The Board is committed to effectively managing climate risk, and we've made great progress over the last 3 years, delivering on the foundational commitments in our 2022 Climate Transition Plan. This has included a 13.3% net reduction, including offsets in our gas infrastructure emissions as well as an 11.6% reduction in the emissions intensity of our power generation assets through investments in renewable energy generation. These reductions have been achieved relative to our FY '21 base year and notably without new growth projects. The underlying reduction in gas infrastructure emissions would have been 22.3%. We've also had extensive engagement with securityholders and other stakeholders on the development of our 2025 Climate Transition Plan, and we have very transparent annual emissions data disclosures and reporting of progress on our climate plans. Building on this work, we recently released our third Climate Report and our 2025 Climate Transition Plan. APA's 2025 CTP, our Climate Transition Plan, reconfirms our commitment to meeting our 2030 targets and goals and highlights the ongoing resilience of APA's portfolio to physical climate and energy transition risks. As part of our commitment to transparency and ongoing investor engagement, today's securityholders will vote on a nonbinding resolution to adopt our 2025 Climate Transition Plan. Now I intend to make more detailed comments on our 2025 CTP and when we come to that resolution on the agenda. This brings me to the 4 resolutions put forward by a group of securityholders led by Market Forces, representing only approximately 0.0167% of the APA securities on issue. The first 2 resolutions proposed to insert a new provision into the trust constitutions, which would give securityholders the ability by special or extraordinary resolution to express an opinion or request information. The next 2 resolutions relate to the development of the Beetaloo Basin and disclosures around APA's planned capital expenditure and alignment with APA's climate commitments and procedures and processes related to APA Supplier Code of Conduct. The Board's response to these resolutions is set out in the Notice of Meeting. And to be very clear, we do not support these proposed resolutions. And based on the proxies received ahead of today's meeting, these resolutions are also not supported by the vast majority of our securityholders. On behalf of the Board and leadership team, thank you to our employees for their outstanding contribution to APA's success. And I'd also like to extend our appreciation and thanks through our customers, communities, governments and other stakeholders for their ongoing support and positive engagement. We are very proud of what's been achieved in APA's first 25 years and we're excited about the future ahead. I'll now invite our CEO and Managing Director, Adam Watson, to address the meeting. Thanks, Adam.

Well, thank you, Michael, and good morning, everyone. As Michael has said, we've delivered a strong overall performance in 2025. My focus today is on 3 items: first is safety; second, our financial performance and progress with our growth strategy; and third, our operational highlights. Let me start with safety. Over the last 12 months, we have continued to work to elevate safety and care within APA. In February 2025, we launched our For The Things That Matter initiative, encouraging everyone at APA to think about personal reasons why they make safety and care a priority. We embedded our psychosocial risk management protocol, and we delivered psychosocial risk workshops to improve the way we understand and manage mental health and well-being. Across the year, our safety performance was strong. That said, a serious harm incident involving an all-terrain vehicle was an important reminder of the need for ongoing vigilance with safety across our operations. Our financial performance for the year was also strong. Total segment revenue, excluding pass-through revenue was up 5.2% to $2.7 billion. Underlying EBITDA was up 6.4% to just over $2 billion, which was towards the top end of our guidance. Statutory net profit after tax was 8.4% higher than the prior period after adjusting the significant items in 2024. We continue to expand our EBITDA margins through strong cost management and the investments we've made in recent years in our systems and processes. With those foundations in place, we have now taken steps to simplify our business and to become even more cost efficient. In the last 12 months, we delivered cost growth below inflation and we've announced a $50 million cost-out target for FY '26. EBITDA guidance for FY '26 is again strong with the midpoint of guidance representing 7.2% growth year-on-year. This reflects our strong underlying business, inflation-linked revenues, growth from new assets and the cost discipline I just mentioned. Turning now to our growth strategy. During FY '25, we progressed a range of value-accretive organic growth projects. Highlights outside those already mentioned by the Chairman, include executing an agreement with CS Energy for new pipeline infrastructure connecting our Roma to Brisbane Pipeline with CS Energy's proposed Brigalow Peaking Power Plant. We continue to see significant growth opportunities to support the much-needed gas power generation infrastructure that is required to facilitate the removal of coal-fired generation and the introduction of renewables into Australia's energy system. We executed agreements and early works to deliver the Sturt Plateau Pipeline in the Northern Territory’'s Beetaloo Gas Basin. We recently announced the receipt of the necessary approvals for the Northern Territory government, and we also obtained our land use agreement from the traditional owners, enabling us to commence construction with the support of our key community stakeholders in the region. The development of the Beetaloo Basin is critical to ensuring long-term supply certainty and the Sturt Plateau Pipeline will ensure gas from the Beetaloo is available to power the Northern Territory from 2026 as well as Australia's East Coast market more broadly. We undertook a number of treasury activities during the year to ensure we have a strong balance sheet to support our attractive growth pipeline. We delivered increased certainty in our regulatory environment following several regulatory decisions, which will support our ability to deliver much needed energy supply for our customers and consumers. In December 2024, the Australian Energy Regulator made a final decision to maintain the current form of regulation for the South West Queensland Pipeline. This outcome gave us the confidence to announce our East Coast Gas Grid Expansion Plan, which has the potential to deliver a 24% increase in north-to-south gas transport capacity and support the delivery of new gas power generation. In June 2025, we also welcomed the final decision to convert Basslink to a regulated asset. And last month, the Australian Energy Regulator released their draft revenue determination. We're ensuring Basslink can continue to operate sustainably for the benefit of Victorian and Tasmanian households and businesses. Our ability to successfully navigate these regulatory reviews is a testament to our focus on delivering value to our customers, communities and our securityholders. We've had many operational highlights, I'll mention just a few. We achieved an ongoing strong performance in employee engagement and diversity. Our annual engagement survey returned an Employee Experience score of 70%. Our Inclusion Index, which assesses equity, authenticity and belonging, rose 4 points to 75%. We continue to build a pipeline of diverse talent with female representation at 58% in our graduate program and 66% in our internship program. We now have 51% of our senior leaders being represented by women. In FY '25, we delivered all remaining actions under our inaugural Reconciliation Action Plan and kicked off FY '26 with the launch of our new Innovate RAP. We are committed to growing our cultural capability and deepening our relationships with traditional owners across our nationwide footprint. To summarize, FY '25 has been a strong year. We've been disciplined with our allocation of capital, and we've maintained a strong balance sheet that can support the funding of our attractive growth opportunities. We've taken ongoing steps to simplify our business and deliver a lean and efficient cost base. I'd like to thank the Board and the executive leadership team for their ongoing work to deliver for our customers, our communities and for you, our investors. To all our employees, thank you for your contribution to our success and your commitment to securing Australia's energy future. With that, I'll now hand you back to the Chairman.

Terrific. Thanks very much, Adam. So now turning to the formal business of the meeting. Securityholders and proxies attending the meeting online, as I said before, can vote by clicking on the Get a Voting Card’ box. For those attending in person, please mark your yellow card to vote, and your cards will be collected at the end of the meeting. Only those holding yellow or blue cards are entitled to ask questions at this meeting. Visitors holding red cards are welcome, but are not entitled to questions. The resolutions for today's meeting are displayed on the screen. If you could bring those up, please. In addition to the ordinary resolutions in Items 1 to 6, as I mentioned earlier, we have 4 special resolutions, which have been requisitioned by a group of securityholders led by Market Forces. To be passed, Resolution 7(a) and (b) require at least 75% of the votes cast by securityholders to be in favor of them. Resolution 7(c) and 7(d) are conditional special resolutions, which will only be put to the meeting if resolution 7(a) and 7(b) are passed by the required 75% majority. And based on the proxies lodged ahead of the meeting, I can say right now, this will not occur. And so 7(c) and 7(d) will not be put to the meeting. Securityholders will be able to ask questions specific to each resolution that is put to the meeting, and questions in relation to general business will be taken at the end of the meeting. For those securityholders who are here in person and wish to ask a question or make a comment on a particular resolution, please raise your card at the appropriate time, and we'll have an attendant come to you with a microphone. Please state your name before asking your question. Once I've addressed questions from the online platform and telephone, I'll then take questions from securityholders in the room. The first item of business today is the adoption of the remuneration report for the year ended 30 June 2025. The remuneration report is included in the Directors' section of the annual report and details of remuneration received by directors and APA's key management personnel for the year ended 30th of June 2025. The details of the total valid proxies for this agenda item are displayed on the screen now, and you can see that. And I'd now like to invite questions or comments -- any questions or comments people may have in relation to Resolution 1. Nicole, are there any questions or comments on this item of business from online or on the phone?

Chairman, there are no questions in the online platform, but we'll now go to the phones. Operator, are there any questions on the phone for this resolution?

There are no questions on the phone line at this time.

Okay. Then, are there any securityholders in the room who have a question or comment, if you could please raise your card and attendant will come to you with a microphone. And it doesn't look like we have anybody there. All right. We'll move to the second item of business today, thank you, which is the adoption of APA's Group -- APA Group's 2025 Climate Transition Plan. As mentioned in my opening address, APA's committed to transparency in the disclosure of climate-related information. Our 2025 climate plan is integrated with our strategy and highlights the important role our business continues to play in Australia's energy transition. The Board has been highly engaged in the delivery of the plan, the priorities of which are to decarbonize our own operations, while at the same time, supporting both our customers' decarbonization ambitions and the Australian economy's transition to net zero. The CTP also reaffirms the headline commitments contained in our 2022 CTP namely a 30% reduction in operational gas infrastructure emissions by 2030, a 30% reduction in methane emissions by 2030 and a 35% reduction in power generation emissions intensity by 2030. In line with our commitment in 2022, we have introduced Scope 3 medium-term goals and a long-term ambition. We've also continued to focus on enhancing resilience of our business to climate-related transition and physical risk. The role of gas empowering the Australian economy and supporting the energy transition is now clearly recognized by both state and territory governments as well as the federal government. Ongoing investment in gas infrastructure is needed to support energy security, help power Australian industry and provide the firming capacity needed to support renewables as coal-fired power stations retire. Such investment is also critical to support the federal government's commitment to cut emissions by between 62% and 70% on 2005 levels by 2035. Gas-peaking generation will support the transition to renewable energy by providing essential and reliable backup. We recognize that the necessary future investment in gas infrastructure may result in emissions growth for APA. However, the economy-wide emissions reduction, this will enable must be prioritized. APA will also look to integrate lower emissions options and new infrastructure whenever feasible. Our ongoing work in power generation in remote regions will also support decarbonization in key industries within our economy as well as deliver reliable, affordable and lower emissions energy to our customers and communities. APA remains committed to responsible climate action, transparent disclosure and supporting Australia's energy transition. And when we look forward to engaging with your questions -- sorry, and we now look forward to engaging with your questions and feedback on this resolution. All right. The details of the total valid proxies for this agenda item are displayed on the screen. And I'd now like to invite questions or comments on Resolution 2. So again, going first of all to online and the phones, Nicole, are there any questions from online or the phones?

Thank you, Chairman. The first question comes from [ David Everett ]. Global heating has already passed 1.5 degrees Celsius and the chances of facing legal actions are surely increasing, which could harm the business. What measures are being taken to avoid legal actions for assisting wrongful production of carbon-based fuels?

I guess the first comment that I would make to that is that we are very conscious of seeking at all times to comply with the law and the absolute myriad of license conditions, regulations, et cetera, that we are required to comply with in the operation of our business. I guess that's the first point, I would say. Second point as to what we're doing, well, in fact, our Climate Transition Plan, which, as we've just seen from the voting has been overwhelmingly endorsed by our securityholders sets out in great detail, what the targets, goals, ambitions are that we have in our plans to support the energy transition in Australia and to support the Australian government's goals, which are in support of the Paris Agreement. So it's all contained in that Climate Transition Plan, what we're doing. Is there another question?

The next question comes from [ Peter and Susan Caldwell ]. A growing concentration of greenhouse gas emissions in the atmosphere is driving increased systemic risk for APA's largest investors due to the impact of climate change on global markets. Does APA have any intention to manage its substantial end-user emissions and mitigate systemic risks for its largest investors?

Look, the first thing I'd say is if anybody is interested, we provide a detailed breakdown of end-user emissions as it called even though they aren't within our Scope 1, 2 or 3 emissions because in effect, we're the courier company, we transport the gas. We don't sell it. But again, in the interest of transparency, we've made our estimates of what end users of the gas that we transport what those emissions might be. In answer to the question, what are we doing about it, we're supporting our customers with their own decarbonization plans and you've heard us talk in the -- in my formal speech about what we've done completing solar and battery projects at Port Hedland. So we're doing things like building solar farms, batteries, wind farms, to help our customers with their own decarbonization plans or if there's someone which is -- who've been in the media in the last week or so, BlueScope talking about their potential to decarbonize -- their operations in Port Kembla, moving away from coal to natural gas if that were to come about. What would we do about that, we'd make sure that we had the necessary infrastructure in place to help them get the gas that they need because it's a very big chunk of gas, but that's the single biggest thing that they could do to decarbonize their operations. We also have a future energy program where we're looking at the potential for CO2 pipelines to eventually support carbon capture and storage. We've invested money in hydrogen, even though the economics of hydrogen as most people may know just doesn't work today. We've also been looking at biomethane, et cetera. Those things are there to help support our customers and to support end users to reduce their emissions. Any other questions?

No further questions on the platform. We'll now go to the phones. Operator, do we have any questions from telephone participants?

There are no questions on the phone line at this time.

All right. I'll then go to any questions from the floor. I have a gentleman in the middle over here. Thank you.

I'm a retired teacher so I'm used to not having a microphone. My name is [ Martin Mansfield ]. I wish to speak against the resolution. The first point I would make is that my family have been APA shareholders or AGL shareholders for a very long time. My parents first bought shares in AGL 1979, and I inherited the APA shares a couple of years ago. But I guess I want to get down to the foundational issue in relation to climate. I note that APA's 2024 climate change policy accepts the science of climate change, and that's been obvious from what Michael Fraser and Adam Watson have said. I assume also that APA accepts the risk assessment recently released by the federal government. So I believe that APA as a company and we as shareholders have to make a choice, not a financial choice, not a choice about the energy transition, but a moral choice that we and we alone have to make. And the choice is this. Are we going to continue to contribute to climate change by facilitating the use of fossil fuels, no matter how much we may reduce our emissions. If we do, we will continue to contribute to the world becoming increasingly inhospitable for our kids and grandkids like my 2-year-old granddaughter who will probably still be alive in 2100 when according to the risk assessment, Australia will face dire consequences, a lot more very hot days like today, for example, with all the health impacts that will cause or will we get out of fossil fuels and turn our whole focus to renewables. This will mean ending our existing participation in the fossil fuel industry as soon as possible and not increasing our participation. For example, if we make this choice, we will not build new pipelines to transport gas from the Beetaloo Basin. If we get out of fossil fuels and focus wholly on renewables, we will be making a contribution no matter how small to making Australia and the world a more hospitable place for our kids and grandkids. The Climate Transition Plan envisages APA making the first of these choices, that is to continue to contribute to climate change, so I cannot support it. APA is not required to provide gas as part of the transition to a net zero economy. If we do, it will be a choice that we make, and we will be responsible for the consequences. APA already has a significant involvement in renewables. So unlike some other companies, we will be able to ramp up our provision of renewables relatively quickly and easily. This will mean that we'll be making a positive contribution to the energy transition instead of contributing to climate change. I urge shareholders to reject resolution 2. I want to be able to look my granddaughter in the eyes as she grows up and tell her that I did everything I could not to make climate change worse, but to combat it and ensure that she and her children and grandchildren have a habitable planet to live on. So my question is this, and it's not a rhetorical question, I would like a response. Will APA make the choice I'm making or will APA continue to contribute to climate change?

Well, thank you. And I guess the first thing that I would say is that we're absolutely on the same page with respect to the need to decarbonize the planet. And we're on the same page with respect to the fact that climate change is real. Where we're not on the same page is what actually needs to happen to make that transition and as best we can keep energy reliable and affordable and decarbonize as quickly as we can. You talk about the federal government, and it is a federal labor government. So that kind of says something given where they sit on this spectrum. And the federal labor government is crystal clear that we need new supplies of gas to support the energy transition. We simply can't get there with the technology as we now have today, and I accept fully and hopefully, that there will be technology developed in the future, that means that we may not need to rely on gas. But where we are today, as Madeleine King, the Resources Minister said, we can't rely on the investments of the past, we need new sources of gas to get us to 2050 and beyond. So the simple fact is we need it to support the energy transition. And you talk about the government and the risk and the assessment, et cetera. The Australian government has clearly stated its support for the Paris Agreement. And it recently announced its new 2035 targets and submitted those under what's known as our nationally determined contribution under the Paris Agreement. And that's committed Australia to targeting reductions of 62% to 70%, below 2005 levels by 2035. Now what does that all mean for us. Well, one of the major policy levers, in fact, I'd argue in many respects, the major policy lever that the federal government has to try and meet those targets is known as the safeguard mechanism, and that's a mechanism that requires large emitters around the country to reduce their emissions over time. The safeguard mechanism actually covers 80% of APA's emissions. Now after having set those targets, the government has also said that they will do -- next year, they will conduct a review of that safeguard mechanism. Now we are required to comply with that mechanism. So whatever it is, so it starts with what Australia's targets are in support of the Paris Agreement. That then goes to the policy mechanism, which will apply to over 80% of our emissions. We expect the safeguard mechanism, would also obviously apply to any large-scale pipelines that may be built to support the Beetaloo Basin, certainly will apply to the upstream producers. So we will have to comply with that. So in short, if we're complying with the safeguard mechanism we're complying with the Australian government support for Paris and we are doing our bit to support the energy transition and keep energy as reliable and as affordable as it can be along the way. Other questions? We have one up here.

Thank you, Mr. Chairman. My name is Lesley Hughes. I'm a Professor Emerita and former pro vice-chancellor research at Macquarie University. I've had a 35-year career in research, looking at the impacts of climate change on people, ecosystems and infrastructure. I'm a former Lead Author in the IPCC's 4th and 5th Assessment Reports. You have repeated at this meeting APA's support for the goals of the Paris Climate Agreement to keep global temperatures well below 2 degrees and to work very hard to keep them below 1.5. It is very clear from the IPCC's latest assessment the latest assessment from the International Energy Agency and abundant peer-reviewed scientific literature that in order to stay at 1.5 or below, no new fossil infrastructure can be afforded for that carbon budget. And by fossil fuel infrastructure, I mean coal, oil and gas. And let me say for those of you that continue to use the terms natural gas, so-called natural gas is 97% methane. It is the second worst greenhouse gas. So my question to you is that how does APA reconcile support for the goals of the Paris Climate Agreement whilst promoting fracking and transport of methane from the Beetaloo Basin? If that project goes ahead, it could release well over a billion tons of carbon dioxide equivalent climate-wrecking greenhouse gases into the atmosphere. How do you possibly reconcile the Paris Climate Agreement with your support for that new fossil fuel infrastructure?

Thank you. Look, a couple of things there, and I noticed and you did very well, thank you for the question. You pivoted from a well below 2 degrees to the 1.5-degree scenario. And I think as you would no doubt be aware, there are a range of scenarios for a 1.5-degree outcome that the IPCC has modeled. And those range of scenarios include gas being at about 60%. I'll say around numbers of today's level up to there are scenarios where you get to net zero, where gas usage is up to something like 160% above, where it is today. So there are a range of scenarios out there. Also, it's been widely acknowledged that now new gas scenario to get to the 1.5 degree that you mentioned, took no account of global security issues. So I'd just point you to the example of Russian gas to Western Europe, which you can talk about strategically, whether that was a smart thing that the Europeans did and most people would say not. So they need to get their gas from somewhere else. I'd also point you to something much closer to home, which is common sense outcomes like the East Coast of Australia, not having to resort to high cost, high emission -- higher emission LNG import terminals to supply domestic gas. And with respect to Paris alignment, I think I've already answered that in the previous question, how the safeguard mechanism is the key mechanism that covers us. And if the government -- the federal government is supporting Paris, and we're in line with that, then that's how we support it. We have another question.

It's all very well to hide behind the Australian government. And in fact, I'm a member of the climate change authority that advised the government on those targets. So very, very well aware of where that came from. To meet those targets, we actually need to be producing 92% of our energy from renewables, not from fossil fuels. So I repeat, we cannot stay underneath 1.5 with any, and I mean, any new fossil fuel infrastructure. Beetaloo is a carbon bomb that puts us way over Australia's current emissions. I don't see how anybody that cares about their children's future, their grandchildren's future, like the previous questioner, can possibly reconcile their conscience with any fossil fuel infrastructure.

Thank you. I take that as a statement and just say that I think I have reconciled for you how we fall in line with the government's ambitions. So another question over -- sorry, is there one down here? Sorry, you missed you down there.

It is not a question, it's just a comment to the previous speakers. I'd like to remind them 1,000 years ago, the Vikings were farming in Greenland. And somebody commented twice in recent memory, not memories, times, there'd be no snow in Antarctica or in Greenland. Is it a natural turning of climates? Or is it due to our presence? I think a lot of this is use our natural occurrence. Thank you.

Thank you. I'll take that as a statement. Gentleman up here in the middle.

Thank you. Good morning. My name is [ Jeff Paisely ]. My great grandparents were shareholders in AGL, my parents were shareholders in AGL. Now I'm one, and have been since I was passed along their shares into APA. We have had some interesting comments today. I think the thing that concerns me is we're going down too far of this path of decarbonizing, which perhaps is good, perhaps not. But if you want to do something for the planet, for your children, for your grandchildren. In this auditorium, we're one of the 1 billion people on the planet who are well off. There's 7 billion people who are not on this planet. Now I don't want to end up living in a cave. I want to live a life which I am used to. With that in mind, I suggest that let's get on with the meeting about making some money for shareholders. I would also like to comment that Mark's matters should be built for the paper and the cr*** that they cause this company with their interference with 10 basis points of shares in this company, that's outrageous. That should be allowed by the government for us to rebuild them for that problem, which they cause us as a company. I don't think I need to say anymore.

Thank you. I take that as a statement. I'm sure it was Market Force as you were referring to. All right. There don't appear to be any other -- sorry, there is one question up over here.

Yes. My name is [ Carrie ]. Thank you for the opportunity to ask a question. My question is about APA's reliance on carbon offsets. To date, in order to meet APA's emissions reduction target, APA has relied heavily on carbon offsets to reduce emissions from its gas infrastructure. The latest Climate Transition Plan and the outlook to 2030, again, emphasizes a continued reliance on carbon offsets. Following the recent greenwashing court case, APA's peer Energy Australia was forced to admit that carbon offsets cannot substitute for actual emissions reduction and they had to make the following statements, "burning fossil fuels creates greenhouse gas emissions that are not prevented or undone by carbon offsets, and storing carbon implant is not equivalent to keeping a store in fossil fuels by not burning them in the first place. " Does APA agree with these statements?

Well, as you know, that was the finding of the court case, so far be it from me to argue with the court.

Considering APA's ongoing use of offsets and the fact that the company's claim to be Paris aligned -- appears to be relying heavily on them. Is APA concerned about exposure to greenwashing allegations and the associated legal risk faced by all company?

We're very careful about our disclosures. And can I just say to you, it is net zero that we're talking about, and it is universally accepted other than in perhaps some people in your universe that offsets are going to be a part of the solution. So I'll just make that comment.

Okay. Thank you.

All right. If there are no further questions, they don't appear to be, I'll move on to the next item of business. The next 3 items of business actually, which relate to the election and reelection of directors on the Board of the responsible entity, APA Group Limited. Those directors being Varya Davidson, James Fazzino and Rhoda Harrington. Two directors are required to retire by rotation under the company's constitution, namely James and Rhoda, and both of them being eligible for reelection. The nomination for Varya for election is to fill a casual vacancy on the Board. We intend to have each director up for election or reelection address the meeting before inviting any questions or comments from securityholders on any of these resolutions. And when we get to the end of their speeches, I will again put up the -- where the votes have landed. So Resolution 3 is the approval of the Board-endorsed nomination of Varya Davidson for election as a Director of APA Group Limited, and I'll now ask Varya to address the meeting. Varya?

Thank you, Michael. Good morning. Standing for election to the APA Group Board is a privilege, and I appreciate this opportunity to seek your support for my appointment. The energy transition, as we've been discussing, is the biggest challenge this country has ever faced. But I also believe it presents us with our single largest social and economic opportunity. So over the last decade, I focused my efforts on solving sustainability, social value and energy transition problems, finding new sources of value through positive action and preserving value through the proactive management of risks. During my career, I have also worked with executives and boards around the world, developing strategies and translating those strategies and strategic intent into action, predominantly focusing on energy and heavy asset industries, including upstream gas, power utilities and resources. I have shaped and led significant enterprise-wide transformation efforts, capital allocation and expenditure programs and M&A activities. I am deeply passionate about the real culture plays in organizations and bring hands-on experience activating culture as a strategic asset. The opportunity to play my part in helping APA fulfill its purpose is exciting, working with the Board and executive team, who are genuinely grappling with how to create value for all stakeholders through the energy transition. I believe APA has a pivotal role to play and is uniquely placed as one of the few Australian companies with the balance sheet and the national energy infrastructure experience necessary to succeed. I am committed to serving your interest diligently and with integrity, and I look forward to contributing positively to the continued success of APA over the years ahead. Thank you.

Thank you very much, Varya, and once again, welcome to the Board. Resolution 4 is the approval of the Board-endorsed nomination for James Fazzino for reelection as a Director of APA Group limited. And I'll now ask James to address the meeting..

It's a privilege to stand before securityholders today seeking reelection to the APA Board. Over the past 3 years as Chair of the Safety and Sustainability Committee, I've been proud to oversee significant achievements that have been delivered by management, which are a 42% reduction in the potential serious harm incidents and a 22% reduction in underlying emissions. These are substantial milestones that demonstrate our commitment to continuous improvement as we build towards an even safer, more sustainable future. The expertise I bring to the Board remains highly relevant, and has been deepened over the last 3 years through active board service. Firstly, customer insight from chairing manufacturing Australia and as the former CEO of Incitec Pivot. And both of those give me unique insights into energy customers' needs. Secondly, policy and regulatory experience. Thirdly, project execution experience in complex infrastructure development and that's critical as APA expands into what is arguably the world's most complex and challenging construction market. Operational excellence in safely managing high hazard facilities in remote locations, leadership in diversity, inclusion and psychological safety; and finally, running sustainable operations that deliver value to both communities and securityholders. Looking forward, my commitment is to continue bringing practical experience, strategic oversight and an unwavering focus on safety, sustainability and securityholder returns as we navigate the critical energy transition. I ask for your support to continue this important work. Thank you.

Thanks very much, James. And look, I just want to take the opportunity to say to security holders, what and say thank you to James for the fantastic job he does chairing our Safety and Sustainability Committee. In particular, there's an enormous amount of work that goes on, not only from a management point of view, but at the Board level in terms of the development of our Climate Transition Plans, the reporting on it, the engagement with stakeholders, security holders, et cetera. So thank you and well done. All right. Resolution 5 is the approval of the Board-endorsed nomination of Rhoda Harrington for reelection as a Director of APA Group Limited, and I'll now ask Rhoda to address the meeting.

Thank you, Michael. Good morning, everyone. As Michael says, I'm Rhoda Harrington. I joined your board in June 2022. Then as Rhoda Di Filippo, I recently changed my name as a result of marriage, but I'm definitely still the same person I promise. I chair the Risk Management Committee, and I serve on both the Audit and Finance and People and Remuneration Committees. I'm honored to offer myself a reelection today at this, which will be for my third time, and I thank you for your consideration. I am passionate about the infrastructure -- I'm passionate about infrastructure, in particular, the energy and technology sectors. And through both my executive and Board experience, I've gained deep insights into both the challenges and as James has just outlined the many opportunities in both the local and international market. Prior to my broad career, my executive career span 35 years in telecommunications, energy, IT and infrastructure, the last 22 of those being in New Zealand and Australia. I hold a masters in telecommunications business and engineering and have worked in commercial, engineering, customer service and operations roles over that time. My global Board experience started way back in 2013. And in addition to my role in the APA Board, I'm a Non-Executive Director of Dexus and ASX listed real assets company. and Waveconn, which is the OMERS pensions fund owned Australian mobile tower phone business. My prior broad career includes chairing an IT company, chairing a global services payment provider, Deputy Chair of the New Zealand Bank and a Nonexecutive Director on an ASX-listed telco and a major Australian gentailer. Outside of work, I'm a proud mom and grand-mom with family who live all over the world, including a son, who is working for the United Nations in Ukraine at the moment. I'm a keen runner, I have completed 35 marathons, and I aim to complete my life goal of 7 marathons in 7 continents by running the Antarctic Ice marathon in December 2026. Despite training for this, I confirm I do have sufficient time to dedicate to the APA Board role. And if reelected, I look forward to working with Adam and this great team as we navigate what you've been outlining today are the exciting strategic choices that we have to over the coming decades. Thank you for your consideration.

I can't let the moment go without sharing something with you because Rhoda just mentioned her training. Rhoda lives in Queensland, not the ideal place to train if you're going to run the marathon in Antarctica. But she does have a local BWS shop, which has a large, as you know, walk-in refrigerator. And she has got them to agree to allow her to put her treadmill in there. And she plans to train for the marathon by doing 10-Ks at a time, part of her training, in the cool room at her local BWS. I am absolutely certain that's going to get picked up by social media and the media more generally. She is running for a charity by the way. So when you do see her and as the time gets closer, please support her. Thank you, Rhoda. The details of the total valid proxies for each of these agenda items are displayed on the screen now. And I'd now like to invite any questions or comments on any of these 3 resolutions. And it doesn't appear -- Sorry.

Chairman, there are no questions on the platform. We'll now go to the phones. Operator, do we have any questions from telephone participants?

There are no questions on the phone line at this time.

Okay. And on the floor, it doesn't appear that we have any questions. So again, we'll move on. Thank you. Resolution 6 is the approval for the grant of performance rights to the CEO and Managing Director, Adam Watson, under APA's long-term incentive plan. The details of the total valid proxies for this agenda item are now displayed on the screen, which you can see people are overwhelmingly in favor. Are there any questions in relation to this resolution?

There are no questions on the platform. We'll now go to the phones. Operator, are there any questions on the phones?

There are no questions on the phone line at this time.

Okay. Any questions from the floor? No, don't appear to be. Thank you. We'll then move to resolutions 7(a), (b), (c), and (d), which, as I've said before, have been requisitioned by a group of securityholders. And again, I think as I might have mentioned, 7(a) and (b) special resolutions they are seeking to amend the constitutions of APA Infrastructure Trust and APA Investment Trust, respectively. As mentioned earlier, Resolution 7(c) and (d), a conditional on (a) and (b) being passed by 75% of securityholders. So 75% securityholders being in favor of the resolutions. The Board's response to those resolutions is set out in the Notice of Meeting and the total proxy resolution voting, you will see there. And it's clear from the proxy votes and the votes represented on the floor of the meeting today that Resolution 7(a) and haven't been passed by the required 75% majority. In fact, it's more than 75% against. And accordingly, Resolution 7(c) and 7(d) won't be put to the meeting. In the interest of transparency, though, as you've seen, we've put up the total valid proxies for all of those resolutions, 7(a), (b), (c), and (d). All right. I'd now like to see if any questions, comments. First of all, again, we'll go online first. Thank you, Nicole.

Chairman, there are no questions from the platform. We'll now go to the phones. Operator, are there any questions from telephone participants?

There are no questions on the phone line at this time.

Okay. Any questions from the floor? Yes, we have one over here.

Thank you very much. Chair, my name is Anjelica Mantikas. And today, I speak on behalf of more than 100 securityholders who have bound together to demand real transparency on APA's Beetaloo Pipeline plans. The projected emissions, the track records of APA's partners in the Beetaloo and the risks to water, health, culture and shareholder value. Resolution 7(c) requests a pre-FID independently overseen analysis, quantifying the full emissions from the proposed Beetaloo pipelines, testing alignment with APA's climate and methane targets and disclosing the role and cost of offsets. This should be the bare minimum disclosure for these incredibly expensive and large-scale pipelines that could run until 2070, exposing investors to stranded asset risk as the clean energy transition rapidly accelerates. If transition risks materialize much greater and much sooner than expected, a 40-year asset can become a 5-year headache and a bloody expensive one overnight. Further, operating these pipelines for 30 years could see end-user emissions in the order of a billion tonnes of CO2 equivalent as our fellow IPCC scientists already has raised with us today. The IPCC has concluded that developing new gas fields is incompatible with the very global climate goals that APA claims it's committed to. Meanwhile, Resolution 7(d) simply calls for a basic independent due diligence report on APA's key partners in the Beetaloo Basin, which since 2021, APA's Beetaloo Partners, Tamboran Resources and Beetaloo Energy, formerly named Empire Energy, have racked up more than 30 recordable and reportable incidents in the Beetaloo; spills, leaks, contamination, the whole lot. Questions have been raised around how consent from traditional owners was obtained for fracking projects APA's pipelines will enable, to the moving of and failure to report ancient aboriginal stone tools found near a fracking well. This string of incidents happened during the exploratory phase, demonstrating a concerning pattern that should raise alarm bells for APA Group and its investors. Chair, if these pipelines are going to operate into the 2070s, then the disclosure on financial risks, climate impacts and key partner due diligence must happen now before billions of dollars of capital is sunk and communities are put at risk, that is why I'm urging shareholders to support Resolution 7(c) and 7(d), which would support greater disclosure from our company on these critical issues. And my question to the board is the following. Commercial gas production in the Beetaloo Basin is only made possible with large-scale gas pipelines. Given APA would be playing a key role in facilitating the expansion of the gas fracking industry and a significant source of new climate pollution, is the company at all concerned about the potentially major adverse impacts such as climate, environmental, agricultural, economic and cultural that may not ever be possible to remediate?

So that's your question?

Yes, correct.

Okay. Obviously, we're concerned to make sure that any potential impacts managed in an appropriate way. And let me just say, there is such comprehensive approval process that has to be gone through just to deal with the environmental, the heritage safety, et cetera, et cetera. There are over 200 different government approvals that just we need to get, let alone what the upstream players need to get in terms of their approval process. So those approval processes will include environmental impact assessments, both from the Northern Territory side, from the Queensland side and no doubt the Feds will be involved as well. So it's comprehensive. And that environmental impact assessment will take into account, I'm sure all the things that you've talked about. From our perspective, you talk about the risk on these and I'd just say, yes, you're right in terms of these are big CapEx projects and there's a heck of a lot that needs to come together for us as a Board to be confident enough to say this is something that we should be investing in. And it's very early on in the process. I mean, just the basics. Yes, they've had very favorable exploration results to date. But to build any large-scale project, whether that's new LNG projects, sending the gas north or it's larger pipelines that go to send the gas to the East Coast. There's a lot more work that needs to be done to prove up the reserves before anybody would take an FID decision on the upstream side of things. From our own perspective, we've got that whole environmental process to go through and to go to something that you've just raised about when we would disclose. The reality is that those environmental assessment processes that we will need to go will require the disclosure of what the environmental impact will be, what the emissions will be. So in terms of disclosure now, technically, you could say we could take an FID decision before that. I can't -- standing here I can't imagine the APA Board taking a decision to go ahead with the project until you knew what all the terms and conditions around the approval were that you had been granted. And if you don't get the approval in the first place, well, it doesn't happen. So there's a lot of water to go under the bridge. We will comply with whatever those conditions are. It will be a very public consultation process. And so I do expect that you will be able to see what the emissions might be. Now the other thing I would say is who knows how it is actually going to be developed in the end. It may well be done in stages. We just don't -- we don't have enough information to put anything that we would be prepared to stand behind publicly. But when it comes to doing the environmental impact statements and the assessments and all the approvals we need to get, of course, we'll stand by what we put forward for our part of that. And again, remind everybody, the upstream players have to have all of that happen as well.