APA locks in 400MW gas peaking plant with CS Energy
APA Group has executed full form agreements with CS Energy to develop and majority own the Brigalow Peaking Power Plant, a 400MW gas-fired peaking facility located adjacent to CS Energy’s Kogan Creek Power Station near Chinchilla, Queensland. The total project cost is expected to be $1,269 million, with early works already complete and main construction now underway.
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Why is APA building a gas peaking plant?
A peaking power plant is designed to operate only when electricity demand spikes or renewable output falls short. Unlike baseload generators that run continuously, peakers provide fast-start dispatchable capacity, firing up within minutes to stabilise the grid during high-demand periods or when wind and solar generation drops off.
This makes peakers a complement to renewable energy, not a competitor. The Brigalow plant will be capable of powering the equivalent of more than 150,000 homes when called upon.
For infrastructure investors, the appeal of this asset class lies in its commercial structure. Long-duration, inflation-linked offtake agreements underpin revenue visibility across decades, insulating returns from short-term energy market volatility. That combination of contracted cash flows and essential-service demand is the core of the infrastructure investment thesis.
Project structure: contracted returns, managed exposure
APA will hold an 80% ownership stake in the project, contributing approximately $1,015 million, while CS Energy retains a 20% interest and will operate and maintain the plant once construction is complete. APA will lead delivery under a construction management agreement.
Revenue will be supported by an inflation-linked, 25-year hedge offtake agreement with CS Energy, which limits APA’s exposure to wholesale electricity prices associated with the operation of the plant. The agreement also incorporates a small portion of variable revenue.
Funding from existing balance sheet
APA’s approximately $1,015 million contribution is expected to be funded from existing balance sheet capacity. Separately, APA is also delivering a new gas lateral and storage pipeline to connect the plant to APA’s Roma to Brisbane Pipeline under a distinct agreement with CS Energy.
Gas pipeline network expansion is running in parallel with Brigalow’s construction, with APA’s $480 million Stage 3 East Coast Gas Grid commitment targeting 30% additional north-to-south capacity by winter 2028, reinforcing the infrastructure backbone that will supply the new peaking plant via the Roma to Brisbane Pipeline lateral.
| Feature | Detail |
|---|---|
| APA ownership | 80% |
| CS Energy ownership | 20% |
| APA capital contribution | ~$1,015M |
| Total project cost | $1,269M |
| Offtake term | 25 years, inflation-linked |
CEO commentary
Adam Watson, CEO and Managing Director, APA Group
“We are pleased to confirm this partnership with CS Energy to support Queensland’s energy security and transition. The Brigalow project aligns with the goals of the Queensland Government’s Energy Roadmap, supporting energy reliability and affordability and demonstrating the important role the private sector can play to bring critical energy infrastructure projects to life. The project also demonstrates momentum with our contracted power generation growth strategy as we continue to progress further opportunities to support Australia’s energy transition on both the east and west coasts.”
Part of a $3.5 billion growth pipeline — what’s next
Brigalow forms part of APA’s $3.5 billion organic growth pipeline, and management has indicated the company continues to progress further contracted power generation opportunities on both the east and west coasts of Australia.
APA’s $3.5 billion growth pipeline was formalised as part of the group’s FY26 results, where management lifted the pipeline estimate from approximately $3.0 billion, anchored by the East Coast Gas Grid Stage 3 expansion alongside Brigalow, with FY27 EBITDA guidance set at $2,260 million to $2,340 million.
The project is targeted for completion in early 2029, with delivery progressing across several key milestones:
- Early project works: complete
- Gas turbines: being delivered by GE Vernova
- Balance of Plant works: Monadelphous commencing main construction
- Target completion: early 2029
The project is expected to deliver returns consistent with APA’s stated hurdle rates. For investors, Brigalow represents the combination of long-duration contracted revenue, inflation linkage, balance sheet-funded delivery, and a clear construction timeline — the structural characteristics associated with established infrastructure assets.
About APA Group
APA Group (ASX: APA; ASX: AP2) is an ASX-listed Australian energy infrastructure business owning and operating a portfolio of more than $20 billion in assets, including gas transmission, processing, compression, and storage infrastructure, as well as electricity generation and transmission assets. The company delivers around half of Australia’s domestic gas through more than 15,000 kilometres of gas pipelines. For more information, visit apa.com.au.
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