Alan has been a Hastings Fund Management Director since September 2007, having had a career spanning nearly 35 years in both the public and private sectors, with extensive experience in the energy industry.
Most recently, Alan was Managing Director of Hastings-managed Epic Energy from July 2004 to July 2007 and made a valuable contribution by transforming Epic into one of Australia’s best performing gas pipeline organisations. Alan has also held executive positions at Ausdoc Group, Email Limited and the State Electricity Commission of Victoria.
When we asked Alan about his broad business background, and how working in the pipeline industry varied from those previous experiences, he said, “As a general comment, business fundamentals are similar no matter what industry you operate in. You still have stakeholders – customers, employees, shareholders, coupled with a legislative and corporate citizenship framework. The business challenges are quite similar.
“Having said that, one area of difference for owners of pipeline infrastructure is the competitive/regulatory environment,” said Alan. “Albeit there is competition via competing pipelines, energy sources, alternative markets, the regulatory environment and role of the Australian Energy Regulator is very different to a fully competitive industry where market forces (largely) determine the competitive landscape.”
Discussing some of the developments that occurred during his time at Epic, Alan outlined that he joined the company in 2004, shortly after Westpac/Hastings Funds Management bought it. He pointed out that at that time the business was based in Perth, due to its then ownership of the Dampier to Bunbury Natural Gas pipeline (DBNGP).
Alan said that the management team’s first task was to address some structural issues, including separating the DBNGP from Epic Energy – after the DBNGP was acquired by a consortia including Alinta in late 2004 – and then floating the business on the ASX, via the Hastings Diversified Utilities Fund in December 2004. In March 2005 Epic relocated its head office (including the Control Room) to Melbourne.
“Strategically, our key task was to re-contract significant volumes on the Moomba to Adelaide Pipeline (MAPS) at the end of 2005. This was achieved, along with growth on our other pipelines,” said Alan.
“During this time, like all industry participants, we considered a large number of potential acquisitions.”
Discussing more recent developments, Alan said, “Epic has had some great success with the recently announced Queensland/South Australia/New South Wales (QSN) pipeline, which will facilitate the sale of Queensland coal seam gas from the Bowen/Surat Basins to both Adelaide and Sydney markets. The new pipeline will connect our South West Queensland pipeline to the MAPS, and also connect into APA’s Moomba to Sydney pipeline.
“The QSN is good news for customers,” he said.
“Given the decline in Cooper Basin reserves and the potential for PNG gas
no longer proceeding, the availability of these large competitively-priced gas deposits provides customers with a valuable alternative source of supply, together with a competitive influence on gas prices.”
Following his move to Hastings Funds Management, Alan has again become part of the broader Australian infrastructure industry, rather than specifically the pipeline industry. Alan told us, “I am now a Director of Hastings Funds Management, which is a specialist manager of infrastructure assets such as gas and electricity, water utilities, airports, toll roads, seaports and timber. It is wholly owned by Westpac and currently has over $4 billion of assets under management. Since joining the Board, I have also been appointed to the ElectraNet Board and anticipate appointment to other investee companies.
“This continuing involvement in the infrastructure industry will result in an (indirect) ongoing interest in Epic Energy and the pipeline industry.”
Looking at the bigger picture of life as a pipeliner, we asked Alan what was the most important thing he learnt through working in the industry.
“The industry sounds so simple – transport gas from the gas production facilities to the large population centres. To do so safely, operate in an increasingly complex environment and make money for all stakeholders is a lot harder.”
Alan continued by saying that he thought APIA has played a critical leadership role in coordinating a response to new industry/regulatory changes, which Alan said are critical to the long-term value of the industry. From the pipeline owners’ perspective, he said, the response to changes has been very professional and thorough, with APIA leading representations with government and the general media.
“To be honest, I initially questioned our level of involvement and, particularly, our financial commitment to APIA as a sponsoring member,” he said. “Over time, however, I became a supporter and eventually became a Board member.”
When we questioned what Alan thought were the main benefits of the APIA model of involvement of owners, contractors and service providers in the industry association, he said “I must admit I found it confusing at the start – whose interests is APIA representing?
“Over time I became more comfortable with the model and now believe it is a strength albeit, at times, it can be a complication with such a broad membership base.
“The strength is that, on the big issues, APIA can indisputably represent the industry and effectively represent members’ interests. If our representation was fractured, we would have significantly diminished impact vis-Ã -vis some of the major interest groups.”
Asked what he sees as the core challenges facing pipeline owners into the future, Alan pointed out that pipelines are long-term assets and a lot can happen during their economic lifetime.
“The industry has changed dramatically in the last decade and will continue to become increasingly competitive,” he said. “A key challenge is ensure the pipeline remains relevant to the energy needs of the market(s) it serves. This will mean increasing collaboration with industry participants in order to formulate a combined market response. In turn, this means more flexible products and services and a partnering approach to solutions.”