As well as potential huge upside this is balanced by potential huge downside for APA due to the potential shift to hydrogen and electricity and away from gas and coal usage. Its earnings are still far too reliant on gas assets.
Yes, gas will still be needed for a long time and it is needed to firm renewables. But the amount of gas used will be a lot lower (e.g. due to miners shifting to renewables and states banning new gas connections) so there will be less demand for APA's existing pipelines and risk has increased of a drop in earnings.
APA is well placed as an energy infrastructure provider to be a player in these new industries. But it has struggled so far to meaningfully shift away from gas infrastructure (e.g. falling short on bids for Ausnet, Tilt renewables and the Central-West Orana Renewable Energy Zone).
While it was able to buy the Basslink transmission line out of administration which increased exposure to electricity the majority of investment by APA is still in legacy riskier gas business such as Northern Goldfields Interconnect and buying Alinta Energy Pilbara which is mostly gas assets.
I think APA still needs to prove that it can find the opportunities to invest in the newer technologies and that this can replace lost earnings from older gas assets.
Hoping that it will get a handout from government to invest in Hydrogen is not a strong enough reason to invest here despite the recent selloff.
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