New APA Group boss Adam Watson says new gas supplies are key to long-term price relief

APA Group’s new CEO says new gas supplies are the best way to keep prices down over the long-term, but is choosing not to weigh into the debate over price caps.

New APA Group boss Adam Watson says new gas supplies are the best way to keep prices down over the long-term, but is choosing not to weigh into the heated debate around the federal government’s controversial intervention in the market.

Mr Watson said gas would continue to play an important role in Australia’s energy transition, and it was a “delicate balance” weighing up the needs of businesses and consumers, and the concerns of upstream suppliers who say the government’s temporary price cap will reduce future supplies.

“We know that this is a complex issue and one that does require a delicate balance,” he said.

“And on the one hand we need to think long term and we need to ensure that there’s appropriate supply going to market, because that’ll be the best thing that we can do as an industry to keep prices low over the long term.

“And we also know that the government’s also trying to balance the need to ensure that manufacturers and consumers have got low cost energy in the short term as well. So it is a balance.”

Mr Watson was announced as APA’s permanent chief executive and managing director on Monday after acting in the role since September following the shock exit of Rob Wheals.

The company is spending $270m on an expansion of its east coast gas pipelines network, but has also been ramping up its investment in renewables in recent years, and owns several wind and solar farm assets, including the 88MW Mica Creek Solar Farm currently under construction near Mount Isa.

It is part of a consortium short-listed for the first “renewable energy zone” in NSW, and is also eyeing offshore wind opportunities following its $773m acquisition of Basslink, the undersea electricity cable connecting Victoria and Tasmania, in October.

Mr Watson said that under his leadership, APA Group would continue to “pick the right investment opportunities that suit the needs of our investors”, while supporting an energy system that’s “safe, reliable, affordable and low emissions”.

“What we’re really proud of is the role that we play in Australia to support that with our investments in renewable power generation, with our investments in electricity transmission,” he said.

“We all know that gas has got a critical role to play in the energy transition, and obviously we’re an important player in that space, and in the work that we’re doing around future fuels.

“Our job is to make sure that we pick the right investment opportunities that suit the needs of our investors. Obviously, we’re going to be very focused on making sure that they suit the needs of the communities and our partners, whether it be government or customers.”

Mr Watson will be paid a base salary of $1.6m plus a short-term incentive of up to 90 per cent of fixed remuneration and a long-term incentive of up to 150 per cent.

He joined APA as chief financial officer in 2020 and previously held senior executive roles at Transurban, Melbourne Airport and BlueScope.

APA chairman Michael Fraser said Mr Watson’s appointment followed a global search.

“Adam’s leadership skills and commercial experience in the growth and transformation of complex and diverse organisations is the right mix for APA’s next phase of growth,” he said.

“Australia’s energy industry is at a major inflection point and the transition to a low carbon future provides APA with significant investment opportunities.

“Under Adam’s leadership the board is confident APA will be well positioned to build on our core strengths and continue to create value for securityholders.”

Originally published as New APA Group boss Adam Watson says new gas supplies are key to long-term price relief