October 05, 2016

Report on Natural Gas Pipeline Integration Featured in The Australian Financial Review

A report authored by Brattle economists on behalf of APA Group was recently quoted in an article in the October 5, 2016 issue of The Australian Financial Review.

The article discusses the return of APA Group’s Chief Executive Officer and Managing Director Mick McCormack, who will be speaking to media and investors on the analysis prepared by Brattle experts highlighting the economic costs and benefits associated with integration in APA’s pipeline operations in Eastern Australia.

Among the benefits quantified, the report finds that integrated ownership has resulted in cost savings of over $110m as the otherwise wasteful duplication of facilities has been avoided, as well as a further $40m of savings that will be realized if expectations of demand increases are borne out. Additionally, operating APA’s pipelines centrally saves around $7m annually in operating costs relative to independent operation of APA’s main Eastern Australia pipelines.

The report, “Benefits and Costs of Integration in Transmission/Transportation Networks: An Application to Eastern Australia Gas Markets,” is authored by Brattle Principals Toby Brown, Paul Carpenter, and James Reitzes, and Senior Associates Jeremy Verlinda and Neil Lessem.