Highlights

  • APA and CS Energy signed a Joint Development Agreement for a 400MW gas peaking plant.
  • Project targets operation in 2028, subject to approvals and full-form documentation.
  • APA plans to acquire 80% ownership after conditions precedent are met.

APA Group (ASX:APA) has announced the execution of a Joint Development Agreement (JDA) with CS Energy for the proposed Brigalow Peaking Power Plant in Queensland. The project involves the development of a 400MW gas-powered peaking facility to be located adjacent to CS Energy’s existing Kogan Creek Power Station. Once operational, expected in 2028, the plant is intended to provide firming capacity during periods of peak electricity demand and supplement variable renewable energy generation.

Development Framework and Conditions

The project remains at a development stage and is subject to a range of conditions. These include securing required external and Government approvals, finalisation of development matters, and the execution of full-form documentation. APA indicated that long-form agreements are likely to be executed around the middle of calendar year 2026, with the market to be updated as milestones are reached.

Ownership and Delivery Structure

Following entry into full-form documentation and satisfaction of conditions precedent, APA will acquire an 80% ownership interest in the project. CS Energy will retain a 20% stake and will be responsible for operating and maintaining the plant. APA is expected to lead project delivery under a construction management agreement once final agreements are in place.

As part of the JDA, APA will provide early-stage funding up to the date it acquires the majority ownership interest. A reimbursement mechanism has been agreed should the project not progress to full-form documentation.

Capital Expenditure and Technology

Final capital expenditure is subject to completion of detailed engineering design, which is scheduled for the first half of calendar year 2026. GE Vernova has been appointed to supply the gas turbines for the proposed power station. The investment will be funded from APA’s existing balance sheet capacity and forms part of its AUD 2.1 billion organic growth pipeline. Returns are expected to align with APA’s internal return requirements.

Revenue Structure and Risk Management

APA plans to limit its exposure to wholesale electricity price movements through a proposed 25-year hedge offtake agreement with CS Energy. Under this arrangement, APA would receive inflation-linked revenue, along with a small variable revenue component that allows limited exposure to price movements.

Gas Infrastructure Integration

The Brigalow Peaking Power Plant will expand APA’s footprint in gas-powered generation. The facility will connect to APA’s Roma Brisbane Pipeline via a new lateral transport and storage pipeline. Development of this pipeline is being undertaken separately by APA, with a Project Development and Gas Transportation and Storage Agreement finalised in July 2025.

Share Price Snapshot
APA was trading 0.70% lower at AUD 9.195 per share as of 01 December 2025.