In an interview with The Australian Pipeliner, APA Group CEO and Managing Director Mick McCormack says the company will continue to invest and grow its extensive infrastructure portfolio despite a potential takeover on the horizon and an uncertain political and regulatory environment.
Speaking to The Australian Pipeliner after the release of the company’s financial year results, Mr McCormack said the Federal Government’s abandonment of the National Energy Guarantee (NEG) had been unfortunate, with the current environment now “a lot more challenging today than it was this time last week”.
“It’s very disappointing. Not only industries in our sector but I think there was broad support for at least the direction of the NEG until it was torpedoed,” he said.
“That’s the shame of it. A lot of work went into it, there was broad support for it and politics have just blown it up.”
Mr McCormack said finding anything to salvage from the remains of the policy would have to wait until current federal leadership issues had been solved.
Despite the death of the policy, Mr McCormack was confident that gas has a big part to play in the future of Australia’s energy mix.
“As time goes on, as more renewables come into the system and more baseload coal exits, you’ve got to have something to firm up the renewables and to my mind that’s where gas will continue to play a very significant role,” he said.
“The time will come one day, which I don’t think is any time soon, when batteries and other technology might be able to fill that role, but right now gas is the most obvious source of energy to firm up the renewables.”
APA has continued to invest in gas related infrastructure and Mr McCormack signalled that the future holds “more of the same”.
“We’re talking to miners about taking gas to replace liquid fuels, there’s midstream projects there, gas processing and such,” he said.
“We’ve just completed one year of a three-year $1.5 billion capital growth program.
“There’s plenty of work within the business to realise that capital growth.”
With recent reports from Australia’s Chief Scientist about the exciting potential of hydrogen, Mr McCormack didn’t rule out the energy source, but acknowledged it was a fair way off.
“It’s (hydrogen) a potential…Let’s put it in perspective, I don’t see it having a big impact any time soon, notwithstanding the fact that it may have a much more significant impact, as in benefit, in future years.”
APA announced last week it had approved the bid from CK Infrastructure Holdings to acquire the company at a valuation of approximately $13 billion.
The deal is currently awaiting approval from the ACCC, with the competition watchdog expected to release its judgment in September.