SYDNEY, June 19, 2026, 09:06 AEST
- APA closed Thursday unchanged at A$10.42 after falling 3.0% on Wednesday; Friday trading had not begun.
- Squadron Energy argues its Port Kembla terminal and Jemena pipeline route weaken the case for APA’s Victorian expansion.
- The Australian Energy Regulator supports extra capacity in principle but has not accepted APA’s costs; a final ruling is due in July.
APA Group securities were poised to resume trading at A$10.42 on Friday as investors assessed a challenge to the pipeline operator’s A$244 million South West Pipeline expansion. The dispute returned to focus after reports this week highlighted opposition from rival Squadron Energy.
The stock was unchanged on Thursday, though the session was far from quiet. It ranged between A$10.31 and A$10.71 on turnover of 5.27 million securities, compared with average volume of 2.97 million, while the S&P/ASX 200 fell 0.62% to 8,911.10. APA had dropped 2.98% a day earlier.
The regulatory treatment matters for future earnings. Approval under Rule 80 would allow eligible spending to enter APA’s regulated asset base — the value on which the operator can earn a return — with depreciation and other costs recovered through higher pipeline tariffs.
APA wants A$212.7 million for two compressor stations and A$31.1 million for early work on possible later pipeline duplication. The project would raise capacity from 523 to 615 terajoules per day, a measure of daily gas flow, and is intended to address projected Victorian shortages from 2029. The regulator has endorsed the need and broad approach, but not the price tag.
Squadron said its Port Kembla Energy Terminal, targeted for winter 2028 subject to final customer commitments, could supply Victoria through Jemena’s reversed Eastern Gas Pipeline. It accused APA of seeking to “convert uncertainty into regulatory certainty for itself” while shifting demand and cost risk to consumers.
APA rejects that argument. In its submission, the company said compression was the “only solution that is prudent” when timing, cost and reliability were considered together, and said it could identify no plausible case in which the new compressors would become stranded assets.
The disagreement reflects two competing answers to southern Australia’s expected gas squeeze. APA Chief Executive Adam Watson said in February that its broader grid investments made it “crystal clear” pipeline capacity would not constrain supply, while Squadron CEO Rob Wheals has described Port Kembla as a “virtual pipeline” offering greater flexibility. APA’s first-half underlying EBITDA rose 7.6%, and its planned organic investment pipeline for fiscal 2026–2028 increased to about A$3 billion.
But the downside runs both ways. Port Kembla still needs final customer commitments, while the regulator has not ruled that APA’s proposed costs are reasonable and has acknowledged that some early work could prove unnecessary. A reduced allowance or delay would likely cut the regulated investment on which APA can earn; approval near the full amount could intensify criticism over tariffs and competition.
The July regulatory decision is now the nearer company-specific catalyst. APA is scheduled to report full-year results on August 20, with the stock about 6% below its A$11.10 52-week high. Until the ruling lands, the shares carry both the appeal of regulated infrastructure income and the less defensive risks of project timing, policy and rival supply routes.
