APA to acquire Alinta’s Pilbara assets in $1.7 billion deal

APA Group has agreed to acquire Alinta Energy’s Pilbara portfolio, which includes 543 MW of operating generation and storage assets and more than 82 MW of solar and battery projects under construction, in a deal valued at $1.722 billion.

Alinta’s Pilbara assets include the 60 MW Chichester Solar Farm, the 178 MW gas and diesel-fired Newman Power Station and associated 35 MW battery, and the 210 MW gas-fired Port Hedland power station. It also includes 200 kilometres of high-voltage transmission lines and a share in the Goldfields gas transmission pipeline, which can transport 203 terajoules a day.

The development pipeline includes the 45 MW solar farm and 35 MW one-hour battery energy storage system being constructed at Port Hedland.

The portfolio also includes 900 MW worth of renewables and storage products under development, including a 30 MW extension to the Chichester solar farm, an expansion of the Port Hedland solar and battery projects, and a series of new wind projects totalling more than 800 MW.

APA Chief Executive and Managing Director Adam Watson said the acquisition is consistent with the gas pipeline giant’s decarbonisation strategy and links directly with it focus on customers in Australia’s resources sector.

“The acquisition of Alinta Energy Pilbara delivers APA a significant new growth platform in the attractive remote-grid energy sector,” he said.

“It allows us to leverage our existing skills in operating large-scale gas, renewables and storage infrastructure, and provides the opportunity to capitalise on the increasing need for reliable, affordable and lower emissions energy as the resources sector continues to decarbonise.”

APA intends to raise $675 million through a pro rata institutional placement and a $75 million share purchase plan. The balance of the purchase price will be funded by new debt facilities established in connection with the acquisition.

Completion of the sale remains subject to certain conditions but is expected to be finalised later this year.

Alinta said the sale will allow it to focus on the delivery of its other renewables and storage projects, including the 1 GW Spinifex offshore wind project in Victoria, and the 900 MW Oven Mountain pumped hydro project in New South Wales.

Alinta, owned by Hong Kong-based Chow Tai Fook Enterprises, said the company’s assets and operations in southwest WA, including its retail gas operations and projects including the recently announced 100 MW Wagerup big battery, are not impacted by the sale.