At the annual meeting of APA in October 2004, securityholders approved changes to the Australian Pipeline Trust (APT) constitution to enable APA to staple securities of another entity to APT units.
Historically APT was a taxpaying public trading trust, with securityholders generally receiving after-tax distributions of income together with periodic returns of capital.
In December 2006, APT Investment Trust (APTIT) was stapled to APT to act as a pass-through trust for tax purposes. A pass-through trust is not required to pay tax on its income and as a result distributions are made pre-tax. Distributions in excess of taxable income resulting from tax timing differences can also be passed through to securityholders as tax deferred income. APTIT is therefore generally able to make higher cash distributions out of the income it receives and also return capital on which tax is deferred until units are sold.
APA believes that the stapled structure allows maximum distribution flexibility to securityholders allowing them to obtain higher cash distributions than would otherwise be the case.
APA’s principal activities relate to the ownership, management and operation of natural gas transmission and distribution assets across Australia.
APA owns and/or operates approximately 14,700 kilometres of high pressure gas transmission pipelines across mainland Australia, transporting more than half of the natural gas used in Australia annually.
APA also owns the Mondarra Gas Storage Facility and the Emu Downs Wind Farm in Western Australia, the Dandenong LNG Storage Facility in Victoria and the Central Ranges Gas Distribution Network servicing Tamworth in New South Wales.
APA manages and/or operates the majority its gas transmission and distribution assets.
APA has interests in the following companies:
- Ethane Pipeline Fund (6.1%) - ASX-listed ethane pipeline company
Energy Infrastructure Investments (19.9%) - unlisted energy infrastructure company that owns a range of energy-related infrastructure assets including gas-fired power generation and gas processing plants, electricity interconnectors and gas pipelines.
EII2 (20.2%) - unlisted energy infrastructure company which owns the North Brown Hill Wind Farm in South Australia
GDI (EII) Pty Ltd (20%) - unlisted energy infrastructure company which owns the Allgas Gas Distribution Network
SEA Gas Partnership (50%) - owns the Sea Gas Pipeline (unregulated) which transports natural gas from the Otway and Bass Basins to markets in Victoria and South Australia
Diamantina Power Station Pty Ltd (50%) - owns a gas-fired power station in Mount Isa, Queensland
APA operates and/or maintains and/or provides corporate services to the assets of its energy infrastructure and investments, and to a number of third parties. Its main customers are Ethane Pipeline Income Fund, Energy Infrastructure Investments, GDI and the Diamantina Power Station joint venture. Asset management services are generally provided to these customers under long term contracts.
APA also has a long-term agreement to operate Australian Gas Networks gas transmission and distribution assets.