APA and CS Energy have signed an agreement to increase transportation volumes to CS Energy’s Swanbank E Power Station on the Roma-Brisbane Pipeline (RBP).

Under this agreement the gas usage at the power station is anticipated to increase from its current level of 7 PJ p.a to in excess of 15 PJ p.a., according to APA.

The contract has a life of 12.5 years. As the agreement begins immediately it will boost APA’s revenues for the current financial year.

The Swanbank E Power Station is the largest gas fired power station in Queensland supplying electricity into the national electricity market (NEM).

In other news, APA has also entered into a heads of agreement with the owners of the Kogan North coal-bed methane field (CS Energy Ltd and Arrow Energy NL, 50% each) under which APA will own and operate the gas processing facilities. Final agreements are currently being negotiated and are anticipated to be completed in the next few weeks.

First sales gas from Kogan North is due in September 2005.

APA managing director Jim McDonald yesterday announced his intention to retire in July.

McDonald, who has been chief executive officer and managing director of APA since its ASX listing in June 2000, said he felt the time was right to hand over to a new chief executive.

“We have acquired all of the minority interests in our pipelines and diversified risk across our pipeline portfolio,” McDonald said.

“We have had four good years of compound growth and I have no reason to doubt it will be five good years, come July. APA is positioned as a strong, profitable business with reliable and stable cash flows.”

McDonald said his successor would be APA chief operating officer Mick McCormack.

“Mick has been a key contributor to our success, and I am pleased he has been chosen to lead APA into the future," McDonald said.

McCormack has qualifications in science, engineering and business, and 20 years experience in the oil and gas transmission industry. He began his pipeline career in Queensland as an engineer on the Moonie-to-Brisbane crude oil pipeline.

He is a member of the board of the Australian Pipeline Industry Association and fellow of the Australian Institute of Company Directors.