APA Group Stapled Securities (OTCPK:APAJF) entered into a joint development agreement with Queensland‑based CS Energy to develop, own, and operate a 400‑MW natural‑gas peaking power plant adjacent to CS Energy’s Kogan Creek Power Station. APA will hold an 80% equity stake, while CS Energy will own the remaining 20%. The project is slated to be operational by 2028 and will be backed by a 25‑year offtake contract that provides inflation‑linked revenue for APA.
The agreement marks APA’s first major gas‑to‑power (GPG) project in several years and signals a strategic shift toward projects that support renewable‑energy integration. By partnering with CS Energy, APA gains access to local expertise, existing infrastructure, and a proven supply chain, while retaining majority control of the plant’s operations and revenue streams. The plant’s design includes 12 GE Vernova aeroderivative turbines that can ramp from cold to full output in five minutes, enabling it to provide firming capacity during peak demand and to support Queensland’s renewable‑energy targets.
APA’s CEO Adam Watson emphasized that the Brigalow project “builds on APA’s existing capabilities and assets in Queensland, driving momentum in our GPG growth strategy and complementing our separate agreement with CS Energy to deliver the project’s lateral pipeline.” The plant’s hydrogen‑ready design also positions APA to transition to renewable hydrogen in the future, aligning with the state’s clean‑energy roadmap.
Financially, the joint development agreement is expected to strengthen APA’s organic growth pipeline, which was valued at approximately $2.1 billion in FY 2025. The 25‑year offtake contract provides a predictable revenue stream that supports APA’s target of maintaining a healthy return on invested capital while keeping debt levels manageable. The project’s capital expenditure will be finalized after detailed engineering design, expected to conclude in the first half of 2026.
Overall, the agreement enhances APA’s portfolio diversification, reinforces its commitment to supporting Australia’s energy transition, and positions the company to capture growth in the growing demand for firming capacity that complements intermittent renewable generation.
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