APA GROUP | 5(c) Capital discipline and financial resilience
Status
Filed
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
APA.AX
Lead filer
Resolution ask
Report on or disclose
ESG theme
- Environment
ESG sub-theme
- Climate change
- Fossil fuel financing
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Utilities
Company HQ country
Australia
Resolved clause
Securityholders request that APA Group Limited, in its capacity as responsible entity, disclose how it ensures capital discipline and safeguards long-term financial value when considering Final Investment Decisions (FIDs) on material greenfield gas transmission infrastructure.
These disclosures shall explain whether and how APA Group Limited, in its capacity as responsible entity, stress-tests the resilience of proposed material greenfield gas transmission infrastructure projects under low gas demand and low gas price scenarios, including scenarios aligned with the climate goals of the Paris Agreement.
These disclosures shall be made to all securityholders by no later than the FY27 Annual Report and shall include the principal data sources and assumptions used for these assessments with reasonable detail, but without disclosing any specific matters which are commercially sensitive.
These disclosures shall explain whether and how APA Group Limited, in its capacity as responsible entity, stress-tests the resilience of proposed material greenfield gas transmission infrastructure projects under low gas demand and low gas price scenarios, including scenarios aligned with the climate goals of the Paris Agreement.
These disclosures shall be made to all securityholders by no later than the FY27 Annual Report and shall include the principal data sources and assumptions used for these assessments with reasonable detail, but without disclosing any specific matters which are commercially sensitive.
Supporting statement
Further information available on Market Forces' website via the below link.
Resolution and supporting statement: https://publications.marketforces.org.au/link/1044611/
__________
Resolution supporting statement
APA Group (APA) has committed to capital discipline[1] and to supporting the goals of the Paris Agreement.[2] [3] This resolution asks how those commitments are applied when the Board considers a Final Investment Decision (FID) on material greenfield gas transmission infrastructure. It does not seek commercially sensitive information and preserves the Board's discretion over capital allocation.
Capital at risk
A material element of APA's growth strategy is large, long-lived greenfield pipelines. Using pipeline cost estimates from energy consultancy Rystad Energy,[4] we estimate APA’s proposed North-East Australia Pipeline (NEAP)[5] could cost between $3.75–$7.31 billion. Distributed over a 5-year build period, this could see APA’s annual growth capex increase 114-223% from FY25 levels.[6]
For this capital to earn its return, four things must hold:
• forecast domestic demand declines must not eventuate
• Beetaloo gas, which the NEAP would service, must find export demand for decades
• gas prices must cover NEAP’s costs
• NEAP must be delivered close to budget and schedule.
Each of these assumptions carries material risk. APA may contend that long-term take-or-pay contracts transfer risk to counterparties. While this mitigates risk, it does not remove it entirely. Contracts do not protect against cost overruns or delay, and contracts shorter than an asset's operating life leave recontracting risk with APA.
Furthermore, this risk exposure is unlikely to be sufficiently managed by contracting with robust counterparties. Counterparty risk cannot be separated from the demand and price assumptions underpinning the investment. As such, demonstrating the financial resilience of these assets under lower-demand and lower-price scenarios is critical for securityholders.
Were counterparties to face adverse conditions, it would most likely reflect conditions affecting the sector as a whole such as weaker LNG demand, or project-specific issues such as production costs above prevailing prices. Those same conditions could impair the pipeline's own economic performance.
Domestic demand forecast to fall
APA regularly refers to the Australian Energy Market Operator’s (AEMO) Gas Statement of Opportunities (GSOO) in disclosures addressing strategy.[7] [8] The latest 2026 GSOO forecasts:[9]
• residential demand declining by 82%,
• gas-powered generation declining by 60%, and
• industrial demand declining by 44%
by 2045 from historical peaks.[10]
The forecasts are also progressively worsening for companies like APA: over the 20-year forecast period, total domestic gas demand in the 2026 GSOO forecast was 17% lower than the 2025 version and 20% lower than 2024.[11] [12] [13]
Export demand also shrinking
APA has said the Beetaloo gas sub-basin is "principally going to be an LNG export play."[14] However, under a range of scenarios, including some that breach the Paris Agreement’s ‘well-below 2°C’ upper warming limit, global LNG demand to 2050 falls significantly: by ~51% (2°C scenario), ~72% (1.8°C scenario) and ~95% (1.6°C scenario).[15]
Further, forecasts for emerging Asian markets on which LNG demand growth depends are falling, irrespective of climate scenario constraints. In two years, London Stock Exchange Group’s (LSEG) 2032 LNG import forecasts have declined by ~73% (Pakistan), ~61% (the Philippines), ~39% (India), ~36% (Bangladesh), ~40% (Thailand) and ~36% (Indonesia).[16] APA has not disclosed a demand outlook that underpins its export case, or how the NEAP would perform if declining demand trajectories hold.
Export prices face structural glut
New supply from Qatar and the United States is expected to create a substantial global LNG glut, which LSEG estimates at up to 368 bcm by 2036[17] — almost equivalent to China, Japan and Europe's combined 2025 LNG imports. In a glut, high-cost supply is priced out first. Market Forces estimates Beetaloo LNG delivered to Japan could cost between ~$US13-13.5/mmbtu. Separate analysis of Rystad data indicates 96% of LNG supply capacity under construction and 99% of pre-FID capacity would supply gas below $US13/mmbtu.[18] [19]
Upstream economics are the foundation of the export case, and a pipeline requires viable production for throughput. Senior leaders of Chevron and ExxonMobil have expressed doubt over the commercial viability of Beetaloo production.[20]
Management confidence is not a substitute for disclosure
In February 2026, CEO Adam Watson told analysts that “demand’s not an issue” and that "you've got to have comfort that the demand for our product is there."[21] Weeks later, AEMO published the 2026 GSOO, showing a declining outlook for domestic gas demand.
In November 2020, after taking FID on the Northern Goldfields Interconnect, APA expected "a strong portfolio of long-term contracts" by mid-2022 and claimed it knew the market well.[22] Based on current disclosures, the pipeline is currently 38% contracted, falling to just 12% in 2029.[23]
APA has not reconciled its public confidence in demand with the regulator's forecasts, nor disclosed which of the two underpins its planning for the NEAP.
What the resolution asks
This resolution simply asks APA to close a significant disclosure gap. APA's 2025 Climate Transition Plan limits its scenario analysis and financial resilience testing to select existing operational assets, and does not cover uncommitted greenfield projects such as the NEAP.[24] AASB S2 requires disclosure on entity-level resilience analysis against a Paris-aligned scenario, which cannot be properly conducted without understanding the resilience of both operational assets and material planned growth projects.[25]
APA has demonstrated it can perform the requested analysis. It applies scenario-based resilience testing to existing and committed assets, and management has described maintaining a gas market model to assess risk.[26] Assumptions of this kind must already inform any significant FID. The gap is one of disclosure, not capability. If APA already conducts this testing, providing securityholders with the principal data sources and assumptions for assessing proposed material greenfield gas transmission infrastructure projects imposes little additional burden.
This disclosure is necessary to demonstrate APA's stated commitment to capital discipline and long-term value, and would let securityholders judge the basis of decisions that will make or break returns for decades.
We encourage securityholders to vote in favour of Resolution 5(c).
Footnotes:
[1] https://admin.apa.com.au/media/fx4omzgo/260219_asx_release_apa_1h26_results_presentation.pdf
[2] https://admin.apa.com.au/media/1mrmdk5q/260106_climate_policy.pdf
[3] https://admin.apa.com.au/media/ps3pi4g4/250918_notice_of_annual_meeting.pdf
[4] https://www.jemena.com.au/globalassets/07052025-competitiveness-of-lng-imports-report.pdf
[5] https://www.apa.com.au/operations-and-projects/gas/gas-transmission/north-to-east-australia-pipeline-project
[6] https://admin.apa.com.au/media/h02ko5t1/250820_asx_release_apa_fy25_results_presentation.pdf
[7] https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-03058179-2A1654356&v=undefined
[8] https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02980466-2A1614692&v=undefined
[9] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo
[10] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo/2022-gas-statement-of-opportunities
[11] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo/2024-gas-statement-of-opportunities
[12] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo/2025-gas-statement-of-opportunities
[13] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo
[14] https://finance.yahoo.com/quote/APA.XA/earnings/APA.XA-H1-2026-earnings_call-376691.html
[15] https://www.climate-resource.com/media/decarb-futures/The_last_LNG_train_home.pdf
[16] LSEG LNG Outlooks (2024, 2025 and 2026 editions)
[17] LSEG LNG Outlook 2026
[18] https://www.accr.org.au/downloads/investor-briefing_shell-gamble-on-gas_2025.pdf
[19] https://www.accr.org.au/downloads/accr_forkintheroad_wds_12226.pdf
[20] https://www.afr.com/companies/energy/chevron-warns-of-australian-fuel-shortage-risk-blames-policy-choices-20260529-p6022l
[21] https://finance.yahoo.com/quote/APA.XA/earnings/APA.XA-H1-2026-earnings_call-376691.html
[22] https://announcements.asx.com.au/asxpdf/20201125/pdf/44q77w60tvn55g.pdf
[23] https://www.apa.com.au/operations-and-projects/gas/gas-transmission/northern-goldfields-interconnect-ngi
[24] https://admin.apa.com.au/media/n2yfmsol/2025_climate_transition_plan.pdf
[25] https://standards.aasb.gov.au/aasb-s2-sep-2024
[26] https://finance.yahoo.com/quote/APA.XA/earnings/APA.XA-H1-2026-earnings_call-376691.html
Resolution and supporting statement: https://publications.marketforces.org.au/link/1044611/
__________
Resolution supporting statement
APA Group (APA) has committed to capital discipline[1] and to supporting the goals of the Paris Agreement.[2] [3] This resolution asks how those commitments are applied when the Board considers a Final Investment Decision (FID) on material greenfield gas transmission infrastructure. It does not seek commercially sensitive information and preserves the Board's discretion over capital allocation.
Capital at risk
A material element of APA's growth strategy is large, long-lived greenfield pipelines. Using pipeline cost estimates from energy consultancy Rystad Energy,[4] we estimate APA’s proposed North-East Australia Pipeline (NEAP)[5] could cost between $3.75–$7.31 billion. Distributed over a 5-year build period, this could see APA’s annual growth capex increase 114-223% from FY25 levels.[6]
For this capital to earn its return, four things must hold:
• forecast domestic demand declines must not eventuate
• Beetaloo gas, which the NEAP would service, must find export demand for decades
• gas prices must cover NEAP’s costs
• NEAP must be delivered close to budget and schedule.
Each of these assumptions carries material risk. APA may contend that long-term take-or-pay contracts transfer risk to counterparties. While this mitigates risk, it does not remove it entirely. Contracts do not protect against cost overruns or delay, and contracts shorter than an asset's operating life leave recontracting risk with APA.
Furthermore, this risk exposure is unlikely to be sufficiently managed by contracting with robust counterparties. Counterparty risk cannot be separated from the demand and price assumptions underpinning the investment. As such, demonstrating the financial resilience of these assets under lower-demand and lower-price scenarios is critical for securityholders.
Were counterparties to face adverse conditions, it would most likely reflect conditions affecting the sector as a whole such as weaker LNG demand, or project-specific issues such as production costs above prevailing prices. Those same conditions could impair the pipeline's own economic performance.
Domestic demand forecast to fall
APA regularly refers to the Australian Energy Market Operator’s (AEMO) Gas Statement of Opportunities (GSOO) in disclosures addressing strategy.[7] [8] The latest 2026 GSOO forecasts:[9]
• residential demand declining by 82%,
• gas-powered generation declining by 60%, and
• industrial demand declining by 44%
by 2045 from historical peaks.[10]
The forecasts are also progressively worsening for companies like APA: over the 20-year forecast period, total domestic gas demand in the 2026 GSOO forecast was 17% lower than the 2025 version and 20% lower than 2024.[11] [12] [13]
Export demand also shrinking
APA has said the Beetaloo gas sub-basin is "principally going to be an LNG export play."[14] However, under a range of scenarios, including some that breach the Paris Agreement’s ‘well-below 2°C’ upper warming limit, global LNG demand to 2050 falls significantly: by ~51% (2°C scenario), ~72% (1.8°C scenario) and ~95% (1.6°C scenario).[15]
Further, forecasts for emerging Asian markets on which LNG demand growth depends are falling, irrespective of climate scenario constraints. In two years, London Stock Exchange Group’s (LSEG) 2032 LNG import forecasts have declined by ~73% (Pakistan), ~61% (the Philippines), ~39% (India), ~36% (Bangladesh), ~40% (Thailand) and ~36% (Indonesia).[16] APA has not disclosed a demand outlook that underpins its export case, or how the NEAP would perform if declining demand trajectories hold.
Export prices face structural glut
New supply from Qatar and the United States is expected to create a substantial global LNG glut, which LSEG estimates at up to 368 bcm by 2036[17] — almost equivalent to China, Japan and Europe's combined 2025 LNG imports. In a glut, high-cost supply is priced out first. Market Forces estimates Beetaloo LNG delivered to Japan could cost between ~$US13-13.5/mmbtu. Separate analysis of Rystad data indicates 96% of LNG supply capacity under construction and 99% of pre-FID capacity would supply gas below $US13/mmbtu.[18] [19]
Upstream economics are the foundation of the export case, and a pipeline requires viable production for throughput. Senior leaders of Chevron and ExxonMobil have expressed doubt over the commercial viability of Beetaloo production.[20]
Management confidence is not a substitute for disclosure
In February 2026, CEO Adam Watson told analysts that “demand’s not an issue” and that "you've got to have comfort that the demand for our product is there."[21] Weeks later, AEMO published the 2026 GSOO, showing a declining outlook for domestic gas demand.
In November 2020, after taking FID on the Northern Goldfields Interconnect, APA expected "a strong portfolio of long-term contracts" by mid-2022 and claimed it knew the market well.[22] Based on current disclosures, the pipeline is currently 38% contracted, falling to just 12% in 2029.[23]
APA has not reconciled its public confidence in demand with the regulator's forecasts, nor disclosed which of the two underpins its planning for the NEAP.
What the resolution asks
This resolution simply asks APA to close a significant disclosure gap. APA's 2025 Climate Transition Plan limits its scenario analysis and financial resilience testing to select existing operational assets, and does not cover uncommitted greenfield projects such as the NEAP.[24] AASB S2 requires disclosure on entity-level resilience analysis against a Paris-aligned scenario, which cannot be properly conducted without understanding the resilience of both operational assets and material planned growth projects.[25]
APA has demonstrated it can perform the requested analysis. It applies scenario-based resilience testing to existing and committed assets, and management has described maintaining a gas market model to assess risk.[26] Assumptions of this kind must already inform any significant FID. The gap is one of disclosure, not capability. If APA already conducts this testing, providing securityholders with the principal data sources and assumptions for assessing proposed material greenfield gas transmission infrastructure projects imposes little additional burden.
This disclosure is necessary to demonstrate APA's stated commitment to capital discipline and long-term value, and would let securityholders judge the basis of decisions that will make or break returns for decades.
We encourage securityholders to vote in favour of Resolution 5(c).
Footnotes:
[1] https://admin.apa.com.au/media/fx4omzgo/260219_asx_release_apa_1h26_results_presentation.pdf
[2] https://admin.apa.com.au/media/1mrmdk5q/260106_climate_policy.pdf
[3] https://admin.apa.com.au/media/ps3pi4g4/250918_notice_of_annual_meeting.pdf
[4] https://www.jemena.com.au/globalassets/07052025-competitiveness-of-lng-imports-report.pdf
[5] https://www.apa.com.au/operations-and-projects/gas/gas-transmission/north-to-east-australia-pipeline-project
[6] https://admin.apa.com.au/media/h02ko5t1/250820_asx_release_apa_fy25_results_presentation.pdf
[7] https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-03058179-2A1654356&v=undefined
[8] https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02980466-2A1614692&v=undefined
[9] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo
[10] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo/2022-gas-statement-of-opportunities
[11] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo/2024-gas-statement-of-opportunities
[12] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo/2025-gas-statement-of-opportunities
[13] https://www.aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/gas-statement-of-opportunities-gsoo
[14] https://finance.yahoo.com/quote/APA.XA/earnings/APA.XA-H1-2026-earnings_call-376691.html
[15] https://www.climate-resource.com/media/decarb-futures/The_last_LNG_train_home.pdf
[16] LSEG LNG Outlooks (2024, 2025 and 2026 editions)
[17] LSEG LNG Outlook 2026
[18] https://www.accr.org.au/downloads/investor-briefing_shell-gamble-on-gas_2025.pdf
[19] https://www.accr.org.au/downloads/accr_forkintheroad_wds_12226.pdf
[20] https://www.afr.com/companies/energy/chevron-warns-of-australian-fuel-shortage-risk-blames-policy-choices-20260529-p6022l
[21] https://finance.yahoo.com/quote/APA.XA/earnings/APA.XA-H1-2026-earnings_call-376691.html
[22] https://announcements.asx.com.au/asxpdf/20201125/pdf/44q77w60tvn55g.pdf
[23] https://www.apa.com.au/operations-and-projects/gas/gas-transmission/northern-goldfields-interconnect-ngi
[24] https://admin.apa.com.au/media/n2yfmsol/2025_climate_transition_plan.pdf
[25] https://standards.aasb.gov.au/aasb-s2-sep-2024
[26] https://finance.yahoo.com/quote/APA.XA/earnings/APA.XA-H1-2026-earnings_call-376691.html
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